Headlines

Spain has been quietly tapping the country's richest piggy bank, the Social Security Reserve Fund, as a buyer of last resort for Spanish government bonds, raising questions about the fund's role as guarantor of future pension payouts, the Wall Street Journal reported today. At least 90 percent of the €65 billion ($85.7 billion) fund has been invested in increasingly risky Spanish debt, according to official figures, and the government has begun withdrawing cash for emergency payments.

India’s record current-account deficit threatens to weigh on the rupee and curb the magnitude of interest-rate cuts forecast to begin this month in support of government policies seeking faster growth, Bloomberg News reported today. The shortfall swelled to $22.31 billion in the quarter ended Sept. 30, the widest in Reserve Bank of India data beginning 1949. The rupee is down 6.1 percent against the dollar in the past three months, fanning price gains that will limit Governor Duvvuri Subbarao to a 25 basis-point rate cut on Jan.

China's average home prices rose in December, ending eight straight months of year-on-year declines, signaling the country's property market is recovering from its lengthy slump, the Wall Street Journal reported today. A survey of property developers and real estate companies showed the average price of housing in 100 Chinese cities rose by a modest 0.03 percent in December from a year earlier, data provider China Real Estate Index System said Friday.

U.K. lenders increased the availability of mortgages and company loans “significantly” in the fourth quarter as the Bank of England’s credit-boosting program began to take effect, Bloomberg News reported yesterday. An index of the availability of secured loans to households rose to 26.2 from 21.9 in the third quarter, the Bank of England said in its quarterly Credit Conditions Survey in London today. A measure for corporate loans jumped to 29.4 from minus 5.5. Both are at the highest level since the survey began in the second quarter of 2007.

Switzerland's oldest private bank yesterday admitted to helping Americans evade U.S. taxes, the first time a foreign financial institution has pleaded guilty to tax law violations, the New York Times DealBook blog reported today. Representatives for Wegelin & Company, a Swiss bank founded in 1741, acknowledged that for nearly a decade the firm helped dozens of wealthy American customers dodge taxes by hiding more than $1.2 billion in secret accounts. As part of guilty plea, Wegelin agreed to pay $74 million in fines, restitution and forfeiture proceeds to the U.S. government.

Italian auto maker Fiat SpA formally asked to buy a second tranche of shares in Chrysler Group LLC held by a United Auto Workers' health-care trust that is the U.S. automaker's second-largest holder after Fiat, the Wall Street Journal reported today. Fiat said the second tranche represents an about 3.3 percent stake in Chrysler, the same amount as the first tranche.

More than 2,200 insolvency cases were opened in Latvia in 2012, representing a 30 percent increase over the 1,724 insolvency cases that were launched in 2011, according to Baltic-Course.com yesterday. Of the 2012 total, 61 percent, or 1,365 insolvency cases, were opened against private individuals and 39 percent, or 873, were launched against legal entities. In 2011, 845 private individuals and 879 legal entities were declared insolvent. Read more.

Polish builder Polimex is targeting larger-than-planned cost cuts and will have its debt on track by the end of June, its chief executive said today, Reuters reported. Last month, Polimex clinched a debt restructuring deal with creditors and bondholders under which state industrial agency ARP will buy up to a third of the builder. Polimex has said it would sell non-core assets worth at least 600 million zlotys ($195 million) and cut operating costs at least 300 million by the end of 2015.

German unemployment increased less than economists forecast in December even as Europe’s debt crisis curbed company investment and economic growth, Bloomberg News reported today. The number of people out of work rose a seasonally adjusted 3,000 to 2.942 million, the Nuremberg-based Federal Labor Agency said today. Germany's economy, Europe’s largest, may have contracted markedly in the fourth quarter after the euro area's succumbed to recession, the Bundesbank said on Dec. 17.

Bank lending to companies in the euro zone continued to slump in November, according to official data published today that could raise expectations of an interest rate cut as early as next week by the European Central Bank, the New York Times reported today. In its monthly report on lending, the ECB said today that loans to companies, not including banks, in the 17-nation currency zone fell at an annual rate of 1.8 percent in November, the same rate of decline as in October.