Headlines

The row between France and Germany over whether to use the European Central Bank to rescue the eurozone has intensified, further shattering international confidence that a solution can be found to the escalating debt crisis, The Guardian reported. On a day when the US president, Barack Obama, accused the eurozone of suffering from a "problem of political will", Paris and Berlin clashed over whether the ECB should be called on to do more to bail out countries that are struggling to borrow.

Lithuania’s banking regulator said hundreds of millions of dollars in assets may be missing from Bankas Snoras AB after the government took over the Baltic nation’s fifth-biggest lender on concern it may be insolvent, Bloomberg reported. More than 1 billion litai ($392 million) of assets may be unaccounted for, central bank Governor Vitas Vasiliauskas told reporters yesterday in the capital, Vilnius. Snoras’s operations were halted until Nov. 21 and a state administrator appointed after the lender ignored recommendations to reduce its credit risk, the regulator said in a statement.

Banks acting as primary dealers of Italian debt are growing uncomfortable with their obligation to buy at bond auctions as the euro zone crisis worsens, increasing the risk that Italy fails to raise enough cash to stay afloat, Reuters reported in an analysis. Since October, Italy's borrowing costs have risen to levels deemed unsustainable, making long-term investors reluctant to buy and increasing the risk that the banks able to bid at auctions are left holding a rapidly depreciating stock of bonds. Borrowing via debt auctions is vital if governments are to cover their budget deficits.

Back in 2003, an investment in Calgary-based Birch Mountain Resources Ltd. seemed like a sure thing. The junior resource company was sitting on a massive limestone deposit in the middle of Alberta’s booming oil sands, where it used for roads and concrete. Despite its promise, by 2007 Birch Mountain had run into trouble as oil sands development slowed, The Globe and Mail reported. The company sought bridge financing (ultimately about $50-million, mostly in debentures that could be converted into shares) from subsidiaries of Brookfield Asset Management Inc.

Former Anglo Irish Bank chief executive David Drumm has challenged the bank’s lawsuit against him in his US bankruptcy case, arguing the Financial Regulator was “fully aware” of the transferring of Seán FitzPatrick’s multimillion euro loans off the books of the bank, the Irish Times reported. Mr Drumm has claimed in new filings lodged in the Boston court that the bank “regularly and fully reported the extent and nature of Mr FitzPatrick’s borrowings to the Financial Regulator as required by law”.

France came under heavy fire on global markets on Tuesday, reflecting fears that the euro zone's second biggest economy is being sucked into a spiralling debt crisis, Reuters reported. Global stocks and the euro fell as Italian bond yields climbed back to unsustainable levels on doubts that Italy's Mario Monti and new Greek leader Lucas Papademos, unelected technocrats without a domestic political base, can impose tough austerity measures and economic reform.

The euro-zone economy barely grew in the third quarter despite a temporary bounce in Germany and France, raising fears that the euro bloc may already be sliding into recession as businesses and consumers cut back on spending in response to Europe's escalating debt crisis, The Wall Street Journal reported. The euro zone remains marked by a deep divide between the vulnerable southern periphery, including Italy, Spain and Greece, and the more prosperous north.

Efforts to amplify the power of the euro zone's rescue fund and convince markets the bloc can handle its debt crisis risk being undermined by delays, surging bond yields and limited investor interest, potentially ruining the plan altogether, Reuters reported in an analysis. A leveraged EFSF bailout fund of 1 trillion euros ($1.4 trillion), agreed at an emergency summit last month, was supposed to be the euro zone's biggest weapon yet to protect indebted Italy and Spain from market attacks.

The Irish Bank Resolution Corporation is to ask the courts in Northern Ireland to overturn the bankruptcy of businessman Seán Quinn, the Irish Times reported. The bankruptcy was secured last Friday with no notice to the bank, which initiated proceedings nine days earlier for summary judgment orders for more than €2 billion against Mr Quinn. IBRC, formerly Anglo Irish Bank, is pressing ahead with its action here and Mr Justice Peter Kelly said yesterday it was “clearly at issue” whether the bankruptcy was properly obtained or, as the bank alleged, contrived to frustrate its case.

The European Commission is set to propose a law within weeks that could let supervisors impose losses on the bondholders of a flagging bank, officials said, a move it has delayed until the end of the year for fear it will panic markets, the Irish Times reported. The law is part of a European framework on winding up or salvaging troubled banks, seen as crucial to preventing another financial crisis, but which is sensitive because it has echoes of the Greek bailout package, in which holders of Greek government bonds share some of the losses.