Headlines

Prime Minister Recep Tayyip Erdogan suffered the worst blow in his decade in power when an old friend quit the cabinet and called for his resignation, the Wall Street Journal reported today. The public chastisement came after the premier pushed Environment and Urban Planning Minister Erdogan Bayraktar, who has served alongside Erdogan since the 1990s, and two other ministers to resign Wednesday. Each has a son who has been implicated in the graft investigation.

Jaguar Mining Inc., the operator of two Brazilian gold mines, filed for bankruptcy protection in Canada as it tries to restructure its debt, Bloomberg News reported yesterday. Jaguar started proceedings under the Companies’ Creditors Arrangement Act in Ontario, the Toronto-based company said yesterday. The company said its recapitalization plan has the support of bondholders who collectively hold about 93 percent of Jaguar’s 4.5 percent convertible notes due Nov. 1, 2014 and 5.5 percent notes due March 31, 2016.

Australia’s four largest banks will need to carry an extra 1 percent of core tier 1 capital from Jan. 1, 2016, due to their systemically important status, according to the country’s banking regulator, Bloomberg News reported yesterday. Australia & New Zealand Banking Group Ltd., Commonwealth Bank of Australia, National Australia Bank Ltd. and Westpac Banking Corp. need to have a greater capacity to absorb losses, the Australian Prudential Regulation Authority (APRA) said in a statement yesterday.

Vietnam’s economic growth accelerated as exports climbed, even as banks struggled to meet the government’s lending target, Bloomberg News reported yesterday. Gross domestic product rose 6.04 percent in the fourth quarter from a year earlier, quickening from a 5.54 percent gain in the three months through September, according to data released by the General Statistics Office in Hanoi yesterday. For the full year, the economy grew 5.42 percent, faster than a 5.25 percent pace in 2012.

The stress in China's financial system appeared to be easing today as short-term borrowing costs fell following the central bank's decision to resume using its most popular tool to inject cash into the money market, the Wall Street Journal reported today. The People's Bank of China is offering 29 billion yuan ($4.8 billion) of reverse repurchase agreements, a form of short-term lending to banks, after halting the use of the instrument for nearly three weeks, traders participating in the sale said.

Reports of suspected market manipulation soared by 43 percent this year as the U.K. financial regulator investigated the rigging of multiple benchmark rates, Bloomberg News reported yesterday. The Financial Conduct Authority (FCA) received 117 reports of suspected “distortion and manipulation” of markets in the 12 months to August, compared with 82 in 2012, according to Bovill Ltd, a financial services consultant in London.

UniCredit SpA said today that it has reached an agreement to sell almost €1 billion ($1.37 billion) in nonperforming loans to Cerberus European Investment LLC, the Wall Street Journal reported today. The Italian bank said that the sale was part of its continuing effort to bolster its credit profile by disposing of noncore assets and that it expected to close the deal by February 28. The sale relates to consumer and personal loans with a total gross value of €950 million. The Italian bank said it had a coverage ratio for eventual potential losses on the loans of more than 90 percent.

Central bankers from around the world will meet next month to discuss whether to scale back their plans for a debt limit that banks say will force them to rein in lending, Bloomberg News reported today. Bank of England Governor Mark Carney has said that central bank and regulatory chiefs will meet in Basel in January “to come to an agreement, an international agreement, on the definition” of the debt-limit rule, known as a leverage ratio. The meeting will take place on Jan. 12.

Bankruptcy cases, both personal and commercial, have shown signs of rising due to the economic slowdown this year, the The Nation reported today. As of October, the Legal Execution Department had 264,232 cases with assets for sale valued at up to Bt3.47 trillion. In the last fiscal year ended September, the department succeeded in settling 25,717 cases by mediating between debtors and creditors and selling assets for Bt33.14 billion out of an estimated value of Bt33.23 billion. For this fiscal year, the department targets to clear at least 150,000 cases.

A cash crunch in China pushed short-term interest rates to a new recent high today and highlighted the difficulties faced by the central bank in managing an increasingly complex and stressed financial system, the Wall Street Journal reported today. Rates rose again despite cash injections last week by the People's Bank of China, which has tried to rein in lending but is facing crosscurrents ranging from government budget tightening to quirks in bank accounting rules to distrust among banks to rising losses on loans that haven't yet been disclosed.