Headlines

Bank of Ireland has attempted to defend its dealings with distressed mortgage holders saying it cannot do special deals as it has to remain profitable, the Irish Times reported. Speaking at the Joint Oireachtas Committee on Finance, Public Expenditure and Reform, Bank of Ireland chief executive Richie Boucher said the institution was offering deals to customers that it was confident would help to keep them in their homes.

When interest rates tumbled following Greece’s entry to the euro, a beachfront apartment or village house with a vineyard suddenly became an affordable investment for middle-class city-dwellers. But a second-home boom fuelled by easily available mortgages turned to bust as the country collapsed into recession, leaving a trail of unfinished buildings, bankrupt local contractors and cash-strapped owners unable to keep up with monthly payments, the Financial Times reported. A blanket ban on foreclosures on properties whose owners owe less than €200,000 is set to expire in December.

Banks have been accused of trying to stop mortgage holders in arrears opting for new state-backed insolvency deals, the Independent reported. The Insolvency Service of Ireland (ISI) is due to start taking applications for debt deals from Monday. Its arrival was supposed to the big fix for the mortgage crisis. But now it has emerged that banks are writing to homeowners in mortgage trouble trying to persuade them to take a deal outside the new service.

Companies in Brazil, struggling with weak economic growth, rising borrowing costs and a currency slump, are likely to boost demand for advice on debt restructuring as early as next year, a partner at investment banking firm Virtus BR Partners said on Tuesday, Reuters reported. The newfound caution of private-sector lenders could make it harder for some companies to refinance existing loans or make new ones, said Eleazar de Carvalho, a senior partner at Virtus. He did not signal out specific sectors, but said refinancing talks between banks and borrowers are starting.

Aston Metals Ltd., a mining exploration company owned by Nathan Tinkler, was placed in receivership as the latest piece of the former billionaire’s empire in Australia to be offered for sale to repay creditors, Bloomberg reported. John Park and Quentin Olde of FTI Consulting Inc. were appointed as receivers in Australia, according to a statement from the West Palm Beach, Florida-based company. Madison Pacific Trust Ltd., representing funds that hold Aston notes, named Park and Olde, according to an e-mail from FTI.

Indonesians who hoped that the depreciation of their currency as the summer progressed was a temporary phenomenon are being forced to face reality: Inflation is taking hold. Companies are raising prices of products like a cup of java and services like a taxi ride to compensate for rising inflation and the local currency’s dramatic August slide, The Wall Street Journal Southeast Asia Real Time blog reported. At malls across Jakarta, a small Americano at Starbucks goes for 22,000 rupiah ($2), up 9% compared with a month ago.

Talks between Hungary’s government and its banking association over a relief plan for households with foreign currency mortgages are focusing on exchange rates, the timing of a possible debt conversion and interest on converted mortgage loans, the secretary general of the country’s banking association said Tuesday, The Wall Street Journal Emerging Europe blog reported.

Banks face being hit with a new set of international capital rules aimed at forcing bondholders rather than taxpayers to bail out failing institutions, the Financial Times reported. Global regulators are seeking support from world leaders to draw up proposals to force banks to hold a minimum amount of debt that can be “bailed in” if a bank collapses.

If joining the European Union was supposed to lift Romania out of poverty, it has yet to work in Aninoasa, a town of 4,800 people in the mountainous central region of Jiu Valley, Reuters reported. Six years after Romania's accession to the EU, not only is Aninoasa still poor - it has also become the first town in Romania to file for insolvency. Town officials took out a bank loan to fund investment projects, they could not repay it, they fell behind on paying other bills and over the years they got themselves so deep in debt they could not carry on.

Companies in exposed parts of Asia are facing a debt-repayment crunch as plunging local currencies make it more costly to repay foreign loans, a situation that is exacerbating stresses on the region's economies, The Wall Street Journal reported. Asian companies took out sizable foreign loans in recent years as the U.S. Federal Reserve kept interest rates low and printed money. For companies in nations like India and Indonesia, rates on U.S.-denominated debt were more attractive than local borrowing costs.