Headlines

This week’s report by the Organisation of Economic Co-operation and Development on multinational taxation may make uncomfortable reading for some Irish policymakers, the Irish Times reported. This is particularly so when you read the examples given in Appendix C of the report, where the authors describe some corporate structures designed to help multinationals avoid taxation. The structures outlined are familiar to those who read about such matters and know what is meant by the “double Irish” and the “Dutch sandwich”.

The Swiss government ordered banks to hold additional capital as a buffer against risks posed by the country’s biggest property boom in two decades, Bloomberg reported. Banks will be forced to hold an extra 1 percent of risk- weighted assets linked to domestic residential mortgages, the government in Bern said in a statement. Lenders would have to add about 3 billion francs ($3.26 billion) to comply with the new rules, which will be enforced from Sept. 30.

Europe must move quickly towards completing its banking union with a credible common backstop or risk undermining its new single bank supervisor, the International Monetary Fund said on Wednesday, the Financial Times reported. In a discussion paper setting out a path to overhaul the eurozone’s financial sector governance, the IMF staff warn of the dangers of leaving the project half-finished, either through political compromises or a loss of momentum.

The Colombian central bank is gearing for a challenging year that will test its ability to steer the economy out of a slowdown while also fighting off the peso's appreciation, one the most disruptive challenges faced by local monetary authorities, The Wall Street Journal reported. "We are seeing high levels of uncertainty regarding the nature of several shocks to prices and production," said Jose Dario Uribe, the central bank chairman, in an interview.

German lighting designer Hess filed for insolvency on Wednesday only months after celebrating its stock exchange debut, deciding an ongoing fraud investigation would scupper any hopes of raising fresh equity, Reuters reported. "After intensive examinations, the management board came to the conclusion that Hess is illiquid, has no positive prognosis of the continuation of the enterprise and the company is, according to the current status of examinations, over-indebted," the company said in a statement.

Europe's common currency has left the continent's southern countries depressed, indebted and struggling to compete internationally. But even in the tumult of Italy's national election campaign this month, the question of euro membership isn't being seriously debated, The Wall Street Journal reported. In Italy, as in Spain, Portugal and other crisis-hit countries, popular support for the euro remains strong.

Household financial distress is at unprecedented levels as seen in the extraordinary rates of arrears in owner-occupied mortgages, according to Central Bank governor Patrick Honohan. Speaking at the bank’s conference on distressed property markets this morning, Mr Honohan said negative equity is not a rationale for debt relief and that the bank will be "ramping up" its contact with financial institutions that have been "behind the curve" in addressing mortgage arrears, the Irish Times reported.

British fashion retailer Republic became the latest casualty of the economic downturn on Wednesday, seeking protection from creditors and putting around 2,500 jobs at risk, Reuters reported. The firm, which operates 121 stores across the UK with a stronger presence in the north of the country, has appointed administrators Ernst & Young to sell the business while it continues to trade. Republic is owned by private equity firm TPG. Ernst & Young said the retailer had been hit by poor autumn trading and a rapid decline in sales in late January.

The government of Belize proposed new terms to restructure the country's $544 million in debt Tuesday in an offer that extended the maturity of the debt and reduced coupon payments, Dow Jones reported. In an address to the nation's House of Representatives, Prime Minister Dean Barrow said the terms of the new plan extend the defaulted bond's maturity to 2038, from 2029, while they reduce the coupon to 5%, from 8.5%. The agreement would provide the country $247 million in relief over the next 10 years, Mr. Barrow said.

Monte dei Paschi pumped up its bid for Antonveneta to trump a rival offer from France's BNP Paribas, paving the way for an eventual state bailout of the world's oldest bank and a political furore in Italy over its finances. The new disclosure comes in a report by Italy's financial police and is based on statements from an adviser to the seller, Spain's Santander. Reviewed by Reuters, the document reveals for the first time why Monte dei Paschi may have offered such a high bid for its smaller Padua-based rival and why it did not conduct any due diligence before agreeing the deal.