Headlines

Announcing a €3.7bn bailout of mortgage lender SNS Reaal, Dutch finance minister Jeroen Dijsselbloem said in a statement he had “looked at every alternative involving private parties”, but found none that could guarantee the stability of the Dutch banking system, the Financial Times reported. An earlier plan to have ING and ABN Amro, two other bailed-out institutions, rescue SNS had been blocked by the European Commission on state-aid grounds. Under the terms of SNS’s rescue, shareholders and subordinated debt holders will see their stakes wiped out.

The Supreme Court of Canada has ruled that the U.S. parent of an insolvent Toronto company is entitled to the Canadian entity’s last $6.75-million, instead of a group of the firm’s retirees, whose pensions were cut after their employer went under, The Globe and Mail reported. The court’s ruling in the case of Indalex Ltd., which plunged into bankruptcy protection in 2009, was is expected to have broad implications for other companies and pension plans across the country.

With the global economy still struggling to recover from the financial maelstrom five years ago, governments around the world have been criticized for largely failing to punish the bankers who were responsible for the calamity. But even here in Iceland, a country of just 320,000 that has gone after financiers with far more vigor than the United States and other countries hit by the crisis, obtaining criminal convictions has proved devilishly difficult, the International Herald Tribune reported.

Polish Prime Minister Donald Tusk turned the screw tighter on his treasury minister Friday by saying the official’s job and place in the cabinet depended on putting the country’s troubled flag-carrier, LOT Polish Airlines, on secure financial footing, The Wall Street Journal Emerging Europe blog reported. Mikolaj Budzanowski, who has been treasury minister since November 2011, is responsible for managing state-controlled businesses and pushing on with a privatization drive to sell hundreds of small companies as well as billion-dollar stakes in larger ones.

Big-name London hedge funds Odey Asset Management and Egerton Capital are among those upping their bets against Monte dei Paschi di Siena in recent days, after revelations the troubled Italian bank faces heavy losses, Reuters reported. Italy's third-biggest bank is under investigation for an opaque series of derivatives and structured finance contracts between 2007 and 2009 that could cost it 720 million euros.

George Osborne has told Royal Bank of Scotland that it must meet its fine to US authorities over the Libor scandal – estimated to be in the region of £300m – from past, present and future bonuses, the Financial Times reported. RBS, which is 82 per cent taxpayer-owned, will discover the extent of its fines next week in a settlement with US regulators and the Financial Services Authority. Estimates of the total fines to US and UK authorities range from £400m-£500m.

The International Monetary Fund in its latest report on the Greek bailout took an interesting look at how far euro-zone economic output would fall if Greece ditched the common currency. The fund’s answer: Maybe a lot, maybe not so much – though even the “not so much” scenario looks pretty bad, The Wall Street Journal Real Time Brussels blog reported. The immediate problem for the euro zone is that a resurrection of the drachma would leave many of Greece’s public and private-sector debts to foreign creditors denominated in euros.

Some global banks are using models that let them hold only one-eighth of the capital held by their competitors against the same assets, according to a new study that will boost claims that banks are manipulating the key measure of bank safety, the Financial Times reported. The study by the Basel Committee on Banking Supervision comes at a time when investors, regulators and some bankers have called into question the way banks calculate their risk-weighted assets (RWA), which in turn determine how much capital they have to hold.

It has been a difficult turnaround for Deutsche Bank. The big German financial firm said on Thursday that it lost 2.2 billion euros ($3 billion) in the fourth quarter, as it was hit by legal costs and expenses related to its restructuring, The New York Times DealBook blog reported. “The results underline the task ahead for Jürgen Fitschen and Anshu Jain, the co-chief executives who took over the bank less than seven months ago and have declared their intention to deal more severely with the legacy of the financial crisis,” Jack Ewing writes in DealBook.

DIY chain B&Q Ireland Ltd has been placed into interim examinership following a hearing at the High Court Thursday, the Irish Times reported. This gives the company protection against its creditors for up to 100 days while the DIY chain attempts to restructure the business and formulate a survival plan to put the business back on a viable financial footing. Under a proposed restructuring, stores in Athlone and Waterford – which employ 92 staff between them - would close. B&Q will also attempt to substantially improve its rental agreements with landlords.