Headlines

Seán Dunne faces the possibility of being declared bankrupt in Ireland as well as in the United States after a Connecticut court allowed Ulster Bank to continue its Irish bankruptcy action against him, the Irish Times reported. In a major setback for the Co Carlow developer, the US bankruptcy court in Connecticut, where he now lives, approved an application by Ulster Bank - one of his biggest creditors which is owed more than €300 million - to continue with Irish legal proceedings to have him adjudicated a bankrupt in Ireland.

After months of careful deliberation, the European Commission has finally found the perfect institution to take on the tricky task of winding down failing euro-zone banks: itself. The commission is “best placed” to become the “final decision-making authority” on bank resolution, the European Union’s executive wrote in a summary of its plans for a single resolution mechanism that was seen by The Wall Street Journal. Resolution is the second leg of the euro zone’s ambitious banking-union project, a cornerstone of the currency bloc’s effort to overcome its three-year-old debt crisis.

The International Monetary Fund is once again looking at how it tackles countries in financial distress. This could have huge implications for government bond markets, the Financial Times reported. Earlier this month the IMF released a paper on sovereign debt restructurings, and a cautiously-worded synopsis of the executive board’s discussion of the report. Although much is yet to be decided, the IMF appears to be testing the waters for a potentially radical shake-up in the sovereign debt restructuring process.

An Italian businessman who founded several technology firms and has been embroiled in a complex tax evasion trial won control Tuesday of the struggling La Perla luxury lingerie and beachwear brand, beating out Italian hosiery and bathing suit maker Calzedonia. Silvio Scaglia, who founded both the Omnitel phone company and then Fastweb broadband provider before selling them off at a healthy profit, has more recently turned his attentions to the fashion business. He recently bought the Elite modeling agency, which he said led him to consider La Perla.

Bad loans in Slovenia's largest banks amount to almost a fifth of all their loans, the country's central bank said on Tuesday, adding that a planned capital hike of 900 million euros should suffice to keep them afloat, Reuters reported. The central bank's Vice Governor Stanka Zadravec Caprirolo said that the planned amount should be "absolutely sufficient" even beyond 2013. The central bank said that bad loans in the country's largest banks, in which the state has a stake, amount to 18.3 percent of all loans.

Brussels is to propose giving itself powers to wind up failing eurozone banks, in an uncompromising banking union plan that pays little heed to Germany’s legal and political concerns. According to a summary of the “single resolution mechanism” proposal seen by the Financial Times, power to shut down banks would be centralised in the European Commission. Brussels would have the clout to overrule the bank’s home country and use funds from a central pot. The blueprint for the resolution authority is due to be published this month.

The sustainability of Hungary’s public debt, the highest in Central Europe as a percentage of gross domestic product, continues to be at risk despite the European Commission’s recommendation that the European Union lift its strict budget monitoring of the country later this month, an analyst from Moody's Investors Service said Monday, The Wall Street Journal Emerging Europe blog reported.

Croatia may have to go straight into an EU disciplinary procedure when it joins the bloc in July and face an even tougher haul than its ex-Communist peers in adapting to free market pressures, Reuters reported. Croatia will become the European Union's 28th member state and only the second entrant, after Slovenia, of the republics that emerged from the Yugoslav wars of the 1990s. Croatia may have to go straight into an EU disciplinary procedure when it joins the bloc in July and face an even tougher haul than its ex-Communist peers in adapting to free market pressures.

European Central Bank chief Mario Draghi has said he expects a "gradual recovery" in the eurozone to start later this year. He also defended a controversial bond purchasing program ahead of a court hearing in Germany, Deutsche Welle reported. "The economic situation in the euro area remains challenging but there are a few signs of possible stabilization," Draghi told an international monetary conference in Shanghai on Monday.

Madrid-listed developer Realia, slated for sale by its owners, infrastructure conglomerate FCC and nationalised bank Bankia, has extended an €847m loan with creditor banks as part of a plan to restructure debt and avoid insolvency, Property Investor Europe reported. FCC in March announced plans to refinance Realia debt ahead of a planned sale, the first step in the group’s new strategy to cut costs and debt and focus on infrastructure and environmental businesses, according to news agency Reuters.