Headlines

The mortgage debt crisis has spiralled out of control as a result of Government inaction, and a generation of Irish people are “locked into an endless battle of attrition with the banks”, a leading arrears advocacy group has claimed, the Irish Times reported. However, a group representing the banking industry dismissed suggestions that the crisis was worsening and welcomed what it described as the “slowing pace of increase” in arrears.

PT Berlian Laju Tanker Tbk creditors, with a combined total of about $125.5 million in claims, filed an involuntary Chapter 11 petition against the Indonesian ship operator, Bloomberg reported. Gramercy Distressed Opportunity Fund II, Gramercy Distressed Opportunity Fund, and Gramercy Emerging Markets Fund, all located in Greenwich, Connecticut, filed today in U.S. Bankruptcy Court in Manhattan, according to court papers.

Germany on Wednesday evening agreed to lay the foundations for a eurozone banking union but warned that creating a common bank supervisor must not raise “very dangerous” expectations of Berlin helping to bail out foreign banks, the Financial Times reported. In a pivotal move that is likely to clear the way for the European Central Bank to take oversight of the euro area’s biggest financial institutions from national supervisors, Wolfgang Schäuble, the German finance minister, said he was willing to compromise on some of his longstanding objections to the scheme.

Perrot GmbH & Co. has been making bell-tower clocks for 150 years, but the order from Saudi Arabia was on a new scale: a 140-foot-diameter clock, installed at a height of more than 1,300 feet, in the heart of the holy city of Mecca. The family-owned company from the Black Forest is building its exports beyond its traditional European base, expanding ties with fast-growing developing countries.

The European Central Bank's pledge to stand by vulnerable euro zone members will be enough to ensure Italy and Spain find buyers for their bonds at parallel auctions on Thursday, Reuters reported. In Italy, the ECB's bond-buying scheme is seen as a solid enough counterweight to the political tension and market jitters triggered by Prime Minister Mario Monti's weekend announcement of his intention to step down early.

Poland's government said Wednesday it is considering a bailout for LOT after the struggling national airline requested more than $125 million in aid amid economic turbulence that has already led to the demise of some other European carriers, The Wall Street Journal reported. LOT's plea for help came less than a month after it staged a lavish ceremony to mark delivery of a Boeing BA -0.46% 787 Dreamliner as it became the first airline on the Continent to fly the new jet. The company said economic woes in Poland and the neighboring euro zone had hurt its business.

The Slovenian government must urgently speed up insolvency and bankruptcy procedures in the financially-troubled euro zone member state, the Bank of Slovenia said on Wednesday, Reuters reported. It said a law recently prepared by the government to streamline the bankruptcy process was "a step forward but too small a step". Insolvency and bankruptcy procedures in Slovenia often take years rather than months. This prevents local banks, burdened with a rising volume of bad loans, from quickly selling assets confiscated from firms that default on loans.

Düsseldorf private real estate group WGF has filed for insolvency in the form of debtor in possession – management remains but under court-appointed supervision - after reporting a €71m loss for 2011. A delay in publication of 2011 accounts has led to its bonds being suspended earlier this week, Property Investor Europe reported. The losses derived from strategic disinvestments and balance sheet measures, especially asset revaluations, WGF said in a statement announcing the insolvency application.

For two centuries, London has reigned as the financial capital of Europe. Now, that supremacy is being challenged by European politicians who question why so much business and trading in the euro is done in a country that does not even use the currency, The New York Times DealBook blog reported. These policy makers are proposing changes that could shift power from the British capital to its longtime rivals, Frankfurt and Paris.

A banking union will help the euro zone resolve its debt crisis but Britain must obtain safeguards to avoid its banks being damaged by a too-powerful European Central Bank, a Peers report said, Reuters reported. Like the government, the report by the European Union Committee of the Lords, backs a euro zone banking union in principle to help stabilise the sector, but it stressed the need to get key details right. Finance ministers from all 27 EU states will try to thrash out a deal on the banking union on Wednesday for EU leaders to endorse at a summit on Thursday and Friday.