Headlines

Hedge funds and other creditors in Iceland’s failed banks are trying to get a response from the nation’s authorities on the status of their claims as the government considers amending the bankruptcy law, Bloomberg News reported. More than five years after Iceland’s biggest banks defaulted on $85 billion, the nation has yet to arrive at an agreement with creditors on how to settle their claims. At stake for Iceland is its financial stability as authorities search for a solution that doesn’t trigger a krona sell-off just as the island tries to scale back capital controls.

Relatives of at least five current and former members of China's top leadership are shareholders in many offshore companies, allowing them to conceal their assets, according to a report from the International Consortium of Investigative Journalists (ICIJ), the South China Morning Post reported. While being a shareholder in an offshore company doesn't constitute a crime or indicate wrongdoing, the report from the US-based group was released at a crucial moment.

The author of a report into state-backed Royal Bank of Scotland's lending to small businesses said he found no evidence of the bank engineering companies into default, Reuters reported. Andrew Large, who was commissioned by RBS last year to conduct the review, said he hadn't found anything to back up accusations made in a separate report by government adviser Lawrence Tomlinson. However, he did say there was an "element of plausibility" behind them.

A final accord on Argentina’s debt with the Paris Club group of creditors could take months to negotiate and wouldn’t place the country’s economic growth and social programs at risk, Economy Minister Axel Kicillof said, Bloomberg reported. Kicillof, presented a proposal to Paris Club Chairman Ramon Fernandez in the French capital yesterday. Officials from the group’s 19 countries will discuss the offer tomorrow, Kicillof said at a press conference in Buenos Aires today. He declined to give details of the plan.

Greece’s highest legal body is expected to demand a reversal of salary cuts for the country’s security services imposed as part of a second €172bn international bailout in a move that could derail this year’s budget and lead to similar claims by other groups of public sector workers, the Financial Times reported. A decision by the council of state leaked to Athens lawyers and local media ahead of its official publication rules that the cuts were unconstitutional and should be fully reimbursed, according to a person with knowledge of the procedures.

When Europe’s most powerful finance minister makes an unscheduled trip to Brussels to meet a handful of European lawmakers, you can be sure that something is amiss, The Wall Street Journal Real Time Brussels blog reported. And indeed, Wolfgang Schäuble’s unusual pilgrimage to Belgium on Monday comes at another tricky juncture for the euro zone: Its much-vaunted banking-union project, billed as the ticket out of its five-year-old financial crisis, is at risk of stalling, amid opposition from the European Parliament to elements of a new system for wind down failing banks.

Indian firms are selling their assets to raise cash, as banks are tightening the screws on loan repayments to help stem rising bad debt, The Wall Street Journal reported. Several companies sold pieces of their business last year, and bankers say more are likely to do so in the coming year, as the Indian economy continues to be sluggish and interest rates remain high. Indian companies had borrowed heavily in the late 2000s, when interest rates were low and India's economy was growing between 8% and 9%.

The creditors of liquidated stockbroking firm Bloxham could get 40 per cent of what they are owed, rather than 10 per cent, if the liquidator wins his challenge to the Irish Stock Exchange’s decision to revoke its membership, the High Court has heard. The firm’s largest creditors include National Irish Bank, owed €8.5 million, and the Revenue Commissioners, owed €2.3 million, the Irish Times reported.

China is moving ahead with reforms to overhaul its financial system by helping banks clean up their balance sheets and launching a trial program to give smaller lenders easier access to cash, The Wall Street Journal reported. The actions join a swift injection of liquidity by the central bank Tuesday into the banking sector as Beijing seeks to avert a cash crunch ahead of the Lunar New Year holiday when demand for funds rise. Under new regulations that took effect this month, Chinese banks have greater freedom to write off small loans that have turned sour.

The accounting watchdog has joined a long list of investigators examining the near collapse of the Co-operative Bank as it launched a review into KPMG’s auditing of the lender’s accounts, the Financial Times reported. The formal investigation by the Financial Reporting Council, which has the power to fine and suspend accountants, will examine the bank’s financial reports in the years leading up to the exposure of a £1.5bn capital shortfall last May.