Headlines

Big depositors in Cyprus's two main banks could be separated from their money for a long time, The Wall Street Journal reported. After rejecting a proposal to tax bank depositors to pay for a bailout, Cyprus—with a sharp push from its euro-zone peers and the International Monetary Fund—will instead put one bank through a kind of liquidation and radically restructure the other. As a consequence, even if Cypriot banks reopen from an extended holiday this week, big depositors will likely find they are still stuck.

Reason prevails but the damage is done. With their 11th-hour agreement with Cyprus for a €10bn bailout, eurozone policy makers avoided the worst: a catastrophic implosion of the island’s banking system and a hasty exit from the eurozone, the Financial Times reported. The deal reverses some initial errors. It targets depositors in troubled banks rather than indiscriminately across the sector. Insured deposits under €100,000 are safe. There will be restrictions on deposit withdrawals and transfers tailored to each bank rather than across-the-board capital controls.

Shares in Bankia tumbled by as much as half yesterday as the final steps of the largest bank rescue in Spanish history crystallises a near total loss for its shareholders less than two years after it listed on the Madrid stock exchange, the Irish Times reported. Bankia shares, which were listed in summer 2011 at €3.75 in a sale marketed to hundreds of thousands of retail investors and deposit holders, opened down more than 50 per cent at €0.12. They closed down 41.4 per cent at €0.14.

The Serbian troubled Razvojna Banka Vojvodine (RVB) will cease to exist next month, after it transfers its assets, clients and loans to another bank and loans to a special fund, an official said on Monday, Reuters reported. In January, the government of Serbia's northern Vojvodina province which owns 62 percent stake in the bank and Belgrade agreed to transfer RVB's deposits and clients to another bank. Its loans will be deposited to a fund in which Vojvodina will own 78.11 percent, while the central government will control the remainder.

The receivers for South Canterbury Finance have nearly finished their work and say they have recovered more than $770 million of the $1.58 billion the company owed, Radio New Zealand reported. South Canterbury Finance was placed in receivership in August 2010. The latest report from receivers Kerry Downey and William Black states all assets from the company have been realised. The receivers' report says all preferential creditors have been paid out in full, but unsecured creditors and shareholders probably won't get anything.

Britain's 'bad bank' running down the loans of two bailed-out lenders repaid 4 billion pounds to the government last year, chipping away at a total owed of more than ten times that amount, Reuters reported. UK Asset Resolution (UKAR), a 'zombie bank' that does not take new business, owes the government 43.4 billion pounds, down from 48.7 billion when it was created in October 2010. Chief Executive Richard Banks said he was "very confident" taxpayers would get back all the money the government spent on rescuing Northern Rock and Bradford & Bingley during the 2008 financial crisis.

Cypriots braced on Sunday for the introduction of strict controls on withdrawing and transferring money from their bank accounts as their president made a last-ditch attempt in Brussels to secure an international bailout to spare the country from a chaotic bankruptcy, the Financial Times reported. The capital controls are expected to be in place on Tuesday morning to prevent a run on the island’s banks if and when they reopen after a 10-day closure that has brought the Cypriot economy to a standstill.

The French government threw in the towel Friday on plans to levy a 75% tax on the rich, a key election pledge of President François Hollande, and acknowledged it wasn't clear how it would hike taxes on the country's wealthiest citizens, The Wall Street Journal reported. After receiving advice from the country's top administrative court, French finance minister Pierre Moscovici said that the top tax rate applied to earned income couldn't exceed 60%, and that the maximum rate on a taxpayer's revenue could not rise above 66% overall.

Dana Gas, the Abu Dhabi-listed energy firm, postponed the shareholder vote for restructuring of the $920 million sukuk to April 23 after a meeting on Sunday failed to meet the required quorum, Gulf News reported on a Reuters story. This is the second time the meeting has been rescheduled after a majority was not reached at a shareholder meet on March 21. Dana announced the new date in a filing on the Abu Dhabi bourse.

Iceland's special prosecutor has indicted two former chief executives and more than a dozen other ex-employees of banks that fell in the financial crisis that gripped the nation in the autumn of 2008, accusing them of stock price manipulation and securities fraud, The Wall Street Journal reported. The charges were brought over the past week by Olafur Thor Hauksson, who was hired in 2009 to investigate suspicions of fraud and allegation at major banks, including now-defunct Landsbanki hf and Kaupthing Bank hf.