Headlines

The family of Seán Quinn has told the Commercial Court the €2.5 million maximum fine the Central Bank could impose on Anglo Irish Bank over €2.34 billion in loans allegedly made for the unlawful purpose of supporting its share price would amount only to the “mildest slap on the wrist” for the bank, the Irish Times reported. The family is entitled to advance arguments that the bank breached Irish and European laws against market manipulation in making such loans and was therefore not entitled to recover the loans from them, their counsel Bill Shipsey SC said.

Greek parties will try yet again on Wednesday to strike a reform deal in return for a new international rescue to avoid a chaotic default, after a string of delays which have prompted some EU leaders to warn that the euro zone can live without Athens, Reuters reported. As one deadline after another has come and gone, leaders of the three parties in the coalition of Prime Minister Lucas Papademos postponed what was supposed to have been a crunch meeting on Tuesday until the following day.

Officials will increase support for construction of affordable housing and ensure that “loan demand from first-home families” is met, the People’s Bank of China said on its website yesterday, Bloomberg reported. A government clampdown aimed at make housing affordable is cooling prices and driving down transactions as Europe’s sovereign-debt crisis caps export demand. Fitch Ratings said yesterday that a “hard landing” for China’s economy is a key global risk, after the International Monetary Fund cautioned Feb. 6 that a deterioration in Europe could cut the nation’s growth rate almost in half.

Oilsands Quest Inc., which explores for oil in sand deposits in western Canada, is seeking protection from its U.S. creditors and shareholders, Dow Jones Daily Bankruptcy Review reported. Oilsands, which once did business as CanWest Petroleum Corp., sought the protection of a Canadian court last November. The Calgary, Alberta, company is now asking the U.S. Bankruptcy Court in Manhattan to recognize the Canadian proceeding and extend its protection to the company in the U.S., where it faces three shareholder lawsuits.

France's biggest listed banks are expected to report lower earnings next week as they forge ahead with downsizing plans aimed at addressing concerns over their exposure to the sovereign debt of Europe's troubled economies, Dow Jones reported. BNP Paribas and Societe Generale are likely to have been hit in the fourth quarter by restructuring costs as the two banks strive to reduce the size of their balance sheets and meet Europe's new stringent capital rules. Analysts are expecting further write-downs on the banks' Greek sovereign bonds.

The European Union sought to patch up differences with Britain over financial regulation, saying on Tuesday there was room for exemptions in a draft European banking law to accommodate stricter local supervision of lenders, Reuters reported. Jonathan Faull, head of the European Commission's financial services unit, said it was a matter of crafting exemptions in the draft EU bank law so Britain, Sweden and others can tailor their local supervision.

Mexican glass maker Vitro SAB said Tuesday that a court in Mexico has approved its debt restructuring, but that it expects certain of its bondholders who have fought the deal to continue efforts against the plan, Dow Jones reported. In a press release, Vitro said a judge in Monterrey approved the proposed restructuring put forward by the conciliator in the case. The restructuring of $1.5 billion in third-party debt has caused controversy among bondholders, as it involves Vitro voting on an additional $1.9 billion in intercompany debt to secure the majority needed for approval.

German chancellor Angela Merkel told Greece today to make up its mind fast on accepting the painful terms for a new EU-IMF bailout, but the country's political leaders responded by delaying their decision for yet another day, the Irish Times reported. Failure to strike a deal to secure the €130 billion rescue - much of which Germany will fund - risks pushing Athens into a chaotic debt default which could threaten its future in the euro zone.

A group of top European banks is disclosing that they didn't borrow money under the European Central Bank's bank-lending program, fearful of being perceived as bailout recipients, The Wall Street Journal reported. The ECB in late December doled out a total of €489 billion ($643 billion) in three-year loans at a 1% interest rate to 523 banks. The primary goal was to avert problems at banks that faced waves of maturing debt but didn't have access to borrow money via traditional funding markets.

European policy makers have begun to worry about similarities between the Portuguese and Greek economies that they fear could derail Portugal's €78 billion ($103 billion) bailout program, The Wall Street Journal reported. That would raise further doubts about the strategy for resolving the euro-zone government debt crisis, which has centered on rapid cuts in budget deficits. If Portugal's program fails, it will add fuel to arguments that the medicine prescribed by Europe undermines growth and thus weakens governments' ability to shoulder large debt burdens.