Headlines

Britain needs to introduce legislation that could break up banks if standards slipped because current reform proposals fall short of what is needed, an influential panel of MPs said, Reuters reported. The Parliamentary Commission on Banking Standards also said the government could set tougher rules for how much leverage banks were allowed, adding the committee itself would consider next year whether to propose banning proprietary trading. The PCBS said on Friday banks should be allowed to sell simple derivatives within their ring-fenced operation, which had been a point of contention.

Ireland expects to return fully to bond markets late next year but needs a deal on easing its bank debt to make sure it can successfully exit its international bailout, Taoiseach Enda Kenny said, the Irish Times reported. Speaking days before Ireland takes over the six-month EU presidency, Mr Kenny told Reuters he was confident an easing of repayment terms on the promissory notes that Ireland pumped mainly into the failed Anglo Irish Bank would be agreed by a March deadline.

Legislation on personal insolvency, which passed through the Dáil and Seanad today, is “the most radical and comprehensive reform of our insolvency and bankruptcy law and practice since the foundation of the State”, Minister for Justice Alan Shatter has said, the Irish Times reported. The Personal Insolvency Bill 2012 will now be presented to President Michael D Higgins for signature. Mr Shatter warned banks and their public interest directors they will have to accept when a debt cannot be repaid, under the new law.

Almost a year ago to the day, the European Central Bank averted financial disaster in the eurozone by offering banks an unlimited injection of cheap three-year cash. Hundreds of banks participated in the ECB’s loan programme and by March about €1tn had been pumped into the banking system via two tranches of the ECB’s longer-term refinancing operations, the Financial Times reported. The LTRO sugar hit was deemed a success, avoiding a liquidity squeeze, temporarily lifting markets and encouraging a flurry of bond issuance in January and February.

Christmas is bleak this year across southern Europe, the area worst hit by the euro zone debt crisis, with many families struggling to provide even a small celebration for their children, Reuters reported. From Lisbon to Athens, Christmas lights are dim, gift purchases are down and suffering families are bitter at the effect of three years of crisis. Conditions are worst in Greece, the country which sparked the debt crisis in early 2010 and has had to swallow sweeping tax rises and spending cuts in exchange for international aid. "It will be difficult.

Next year will be “a make or break” year for Greece’s future as a member of the eurozone, the country’s finance minister has said, warning Europe’s leaders that Athens still faces “the possible risk” of crashing out of the currency bloc.

Former prime minister Silvio Berlusconi said on Tuesday Italy would be forced to leave the euro zone unless the European Central Bank gets more powers to ensure lower borrowing costs, Reuters reported. Berlusconi, who announced this month he will again lead his People of Freedom party (PDL) in a national election expected in February, said on a talk-show on state broadcaster RAI that the ECB should become a lender of last resort for the currency bloc.

Brazil’s consumer-loan default rate fell in November for the first time in five months as the government pushes banks to reduce interest rates, Bloomberg reported. The consumer default rate fell to 7.8 percent from 7.9 percent in October, the central bank said in a report distributed today in Brasilia. Interest rates to consumers fell to a record 34.8 percent.

As times get tougher, discontent about Swiss tax breaks is mounting, Reuters reported in an analysis. Cash-strapped foreign governments have already chipped away at the secrecy that allows rich individuals to store tax-free funds in Swiss bank accounts. Now Europe's governments have turned the spotlight on the incentives Switzerland offers companies. Swiss official company tax rates of around 21 percent compare with 33 percent in France and 29 percent in Germany, according to a 2011 survey by accountants KPMG; often companies in Switzerland actually pay much less.

Mexican glassmaker Vitro said on Monday it had begun a legal process to recover up to $1.59 billion in damages from hedge funds who sued the company in Mexico but lost on appeal, Reuters reported. Vitro went through a $3.4 billion bankruptcy reorganization in Mexico, but some creditors strenuously opposed that plan, and they have been fighting in U.S. courts. Vitro said in a statement that it could collect damages from a trust that has been holding new bonds and payments that correspond to investors who opposed the Mexican restructuring.