Headlines

Europe’s top banking supervisor said Greek lenders have never been better equipped to deal with the country’s financial crisis, in a show of confidence in the debt-laden state’s banks, which have been stressed by fleeing deposits and political uncertainty in recent months. In an interview with The Wall Street Journal, Daniele Nouy, the chairwoman of the Single Supervisory Mechanism—the European Central Bank’s bank-supervisory arm—said Greek banks are demonstrating significant resilience. She said the SSM is monitoring their liquidity and solvency positions very closely.

The Chinese economy continued to slow in April, prompting predictions of more fiscal and monetary stimulus from Beijing, much of which is likely to end up in the booming domestic stock market, the Financial Times reported. Fixed asset investment, a key driver of the economy, expanded by 12 per cent in the first four months of the year from a year earlier, the slowest pace since 2000 and down from 13.5 per cent in the first quarter.

Assets at the Dublin banking arm of Bank of America Merrill Lynch plunged in 2014, as the bank’s retrenchment in Ireland continued and headcount shrunk by a third. The bank, which was once Ireland’s largest bank by asset size, according to The Irish Times’ business database, Top1000.ie, has now slipped back to 14th in a ranking of Ireland’s largest financial institutions.

The Bank of England has cut the amount that it expects the UK economy to grow this year to 2.4 per cent, down from a previous forecast of 2.9 per cent, The Independent reported. In its quarterly inflation report, the central bank trimmed its forecast for UK economic growth over the next three years and reinforced expectations for an first interest rate rise in around a year's time. The fresh projections follow official data showing that growth slowed sharply to just 0.3% in the first quarter of the year, though many expect the reading to be revised once more data is available.

Thirteen Brazilian and international banks filed a lawsuit in New York on Tuesday against two units of ailing engineering and oil conglomerate Grupo Schahin to recover $371 million in overdue principal and interest on loans, Reuters reported. The lawsuit comes weeks after Schahin sought for protection from creditors in Brazil and the United States, and fired 2,500 workers as a corruption scandal at key client Petróleo Brasileiro SA hampered its efforts to refinance up to 6.5 billion reais ($2.1 billion) in debt.

The Canadian and U.S. judges charged with dividing the $7.3 billion from the liquidation of Nortel Networks rejected proposals from former regional businesses and opted for a pro rata split of the money in long-awaited rulings on Tuesday, Reuters reported. Judges on the U.S. Bankruptcy Court in Wilmington, Delaware and Ontario Superior Court of Justice held an unprecedented joint cross-border trial on the dispute, with the courtrooms linked by video. The legal battle has raged for years through numerous courts, chewing up more than $1 billion in fees for lawyers and other advisors.

Ukraine’s $23bn debt restructuring negotiations appeared to reach boiling point late on Tuesday after the government issued a sharply worded statement that questioned the transparency, responsiveness and good faith of a creditors’ committee, the Financial Times reported.

By now it has become familiar: Greece warns that it is about to run out of cash, then manages to scrape together enough to avoid defaulting on its debts. A larger catastrophe is averted in the eurozone, and Greece and its creditors return to haggling over whether the country can get more financial aid, the International New York Times reported. That sequence played out again this week, when Greece managed on Tuesday to make a loan payment of about 750 million euros, or about $837 million, to the International Monetary Fund.

A year after declaring the days of “borrow and spend” were over for Australia, treasurer Joe Hockey on Tuesday shifted the government’s strategy to boosting the economy by ruling out fresh austerity measures, the Financial Times reported. Delivering his second budget against the backdrop of a collapse in commodity prices and lacklustre growth, Mr Hockey cut taxes for small businesses and increased spending on childcare and infrastructure in a bid to create jobs.

European banks are as vulnerable to failing today as they were in the run-up to the 2008 global economic crash and subsequent recession, according to new research, the Irish Times reported. In the first study to compare sources of systemic risk in European banks, economists found banks in southern countries, including France, Spain and Italy, are highly vulnerable to failure. Banks in northern countries appear to be more resilient.