Headlines

Is Spain really on the brink of a remarkable recovery? It's a question with a significance that goes well beyond the troubled Southern European country, The Wall Street Journal reported.

Asia's economic slowdown is threatening to bring two of Europe's highest-flying banks back down to earth, The Wall Street Journal reported. Standard Chartered PLC Tuesday said net profit fell 24% in the first half of the year, as weakening growth in Asian markets and a $1 billion write-down at its South Korean business put a brake on earnings. The announcement came one day after HSBC Holdings PLC's said underlying profit before tax stagnated at its Asia-Pacific unit, which excludes Hong Kong, and warned it was bracing for slower growth in China.

The International Monetary Fund on Monday made a fresh call on Japan's government to bring its flow of red ink under control, saying the central bank's monetary easing could backfire if investors believe it is "monetizing" the growing mountain of government debt, a step that often leads to financial turmoil. The IMF has recently hardened its rhetoric toward Japan, suggesting the rest of the world is worried that Prime Minister Shinzo Abe's cabinet appears divided over whether to stick to a plan to raise its sales tax from next April.

A Chinese lending spree of the magnitude that tipped Asian nations into crisis in the late 1990s and preceded Japan’s lost decades is putting pressure on top leaders to map out a strategy to tackle the threat. Half of the economists in a Bloomberg News survey say non-performing local-government and corporate debt will probably have a “significant impact” on China’s credit and economic growth.

HSBC Holdings Plc, Europe's biggest bank, said it could take a hit of up to $1.6 billion (1 billion pounds) in a settlement with a U.S. regulator over allegations it mis-sold mortgage-backed bonds during the housing bubble, Reuters reported. The Federal Housing Finance Agency (FHFA), the conservator of Fannie Mae and Freddie Mac, has alleged 18 banks misrepresented the quality of the collateral backing securities between 2005 and 2008. Swiss bank UBS paid $885 million in a settlement with the FHFA last month and Citigroup and General Electric have settled for undisclosed sums.

HSBC, Europe’s biggest bank, today vowed to get round new rules capping bankers’ bonuses which it said would have a “highly damaging” impact on many of its operations around the globe, the Evening Standard reported. From the start of next year, European Union rules within the Capital Requirements Directive (CRD) IV will limit bonuses paid to all bankers employed by EU-based institutions to 100% of their base salary, or 200% if shareholders approve.

Wide disparities in the way European banks calculate risk for their sovereign and top-quality corporate debt holdings stem mostly from variations in regulation and differences in collateral and maturity, rather than any consistent effort to play down potential losses on their balance sheets, the pan-EU banking supervisor has found, the Financial Times reported.

Following its bankruptcy filing a few weeks ago, PV specialist Gehrlicher Solar AG could have a new investor, RenewableEnergyFocus.com reported. This is according to preliminary administrator Oliver Schartl of the Munich law firm Müller-Heydenreich Beutler & Kollegen. “I see very good prospects of being soon able to sell Gehrlicher Solar America Corporation to an investor,” said Schartl. Discuussions of the search for an investor supported by a German and US M&A consultancy firm are already at an advanced stage, he reports.

Bank of Ireland (BOI) is working on a strategy to avoid accruing an additional €445 million “step-up” payment to the Government, if it fails to pay back the State’s €1.78 billion holding of high-interest preference shares by next spring, the Irish Times reported. The issue is seen as a top priority within the bank, which yesterday reported its results for the first half of the year.

Portugal's banks have set aside enough money to cover bad debts and are holding enough capital to weather any deterioration of their loan portfolios, the country's central bank said Friday, summing up its review of their loan books, The Wall Street Journal reported. Bank of Portugal said the group of eight lenders had a core Tier 1 capital ratio of 11.2% as of April 30, above the 10% minimum established by the bank.