Headlines

Finance ministers from the biggest euro-zone countries reached a political understanding on a new system for winding down failing banks, officials said early Wednesday, but final signoff will have to wait until next week, The Wall Street Journal reported. Under the proposed deal, decisions on the shuttering or downsizing of banks would be more centralized and the costs of such resolutions would eventually be shared among European countries.

It's been a good year for the eurozone crisis in the sense that flare-ups have been few and minor. But here comes thinktank Capital Economics with the gloomy diagnosis that Greece's public debt (currently at 170% of GDP) is still unsustainably high and "the country's crisis is not yet over". That is despite the clear improvement in the public finances since the second bailout in 2012, The Guardian reported in a commentary. The problem is not the short-term one of plugging a funding gap (of maybe €11bn) for 2014 and 2015 that will appear next year.

While the overall risk to Canada’s financial system has declined for the first time in two years, closer to home the Bank of Canada continues to be concerned about household debt and housing, The Wall Street Journal Real Time Canada blog reported.

As street protests in Ukraine enter their third week, a new crisis is brewing that could force President Viktor Yanukovych’s hand. The nation’s currency reserves have fallen so low that the central bank may soon be unable to support the hryvnia at its current value. Traders’ bets on a weaker hryvnia reached a one-year high on Dec. 10, following a 9 percent plunge in foreign reserves last month, Bloomberg Businessweek reported. Borrowing costs by lenders have soared in recent weeks, suggesting that the government’s efforts to prevent a devaluation are creating cash shortages.

Homburg Invest Inc. is suing several companies chaired by Richard Homburg, its former chairman, for $2,895,000, The Chronicle Herald reported. According to court documents, Homburg Invest is undergoing insolvency restructuring under the protection of the Companies’ Creditors Arrangement Act, with proceedings in the Superior Court of Quebec. As part of that restructuring, the plaintiff divested certain U.S. assets, with limited assistance from Homburg Realty Service, whose parent, according to court documents, is Homburg Canada, now Citadel Holdings.

Alitalia SpA succeeded in raising enough money so Italy's post office will invest in the airline, increasing the likelihood that it will have sufficient capital to keep flying for at least a year as it looks for a partner to ensure its long-term survival, The Wall Street Journal reported. Alitalia, which nearly went bankrupt in October, has raised €225 million ($308 million) from shareholders and creditors, a person familiar with the situation said Monday. That amount was the minimum that Poste Italiane SpA had set as a condition for it to invest €75 million in the airline.

Chinese company debt twice the size of Ireland’s economy will come due in 2014, spurring concern the nation is on the cusp of its first corporate bond default, Bloomberg reported. A record 2.6 trillion yuan ($427 billion) of interest and principal on securities issued by non-financial companies must be repaid next year, 19 percent more than this year and the most since China International Capital Corp. began compiling the data in 2008. Ten-year AAA corporate bond yields surged 89 basis points since Dec. 31 to 6.18 percent, touching a record 6.23 percent on Nov. 27.

The court-appointed monitor for struggling Canadian wireless startup Mobilicity has extended the deadline for suitors to bid for the company by a week to Dec. 16, a regulatory filing shows, Reuters reported. Bidders for the Toronto-based startup, which filed for court protection from its creditors earlier this year, now have until noon next Monday to submit their offers in the court-supervised auction, according to a document posted on the website of monitor Ernst & Young Inc. Ernst & Young said it extended the deadline following requests from several bidders.

Retroactive recapitalisation of the Irish banks “doesn’t seem very likely”, the head of the European Stability Mechanism, Klaus Regling, has said, striking a blow to Ireland’s campaign to receive retrospective aid for AIB and Bank of Ireland, the Irish Times reported. Speaking last night in Brussels, the head of the euro zone’s rescue fund said that, while the process does not require treaty change, it is a “very complicated process” which requires unanimity by member states.

Brazil's Petróleo e Gas Participações SA, controlled by former billionaire Eike Batista, started oil production from a second well in its Tubarão Martelo offshore field, according to a regulatory filing on Monday. Output from the OGX-44HP well began on Saturday, the filing said. Petroleo e Gas Participações SA is the new name of OGX Petroleo e Gas Participações, the company said in a statement late Friday. Output from the field's first well, also in Tubarão Martelo, was announced on Friday.