Headlines

Former Anglo Irish Bank chief executive David Drumm has lost a bid to withhold $500,000 (€364,000) from his creditors in his US bankruptcy case by failing in a claim that his seaside property in Cape Cod was his main home, the Irish Times reported. A Boston court ruled yesterday that Mr Drumm was not entitled to claim a “homestead exemption” for $500,000 on his multimillion-dollar house at Stage Neck Road in Chatham, Massachusetts.

European leaders have primed investors to expect a sweeping euro-zone rescue plan to be unveiled within a week. But several hurdles remain, among them the details of a new Greek bailout, and clearing them could take weeks, not days. The result could be a plan broad in ambition but short on specifics, The Wall Street Journal reported. Finance ministers and central bankers from the Group of 20 industrial and developing economies, after concluding their gathering here Saturday, said they expected an Oct.

Conservative backbenchers have reacted with concern at reports that the UK could be required to provide more money for the eurozone bail-out package via the International Monetary Fund, the Financial Times reported. Speaking at a meeting of finance ministers from the G20 group of leading economies, George Osborne, the chancellor, told journalists: “We have indicated our willingness to consider additional funds for the IMF.

A scramble to retain customers pulling their money from traditional deposit accounts is causing Chinese banks to use a growing number of alternatives that regulators fear could undermine the financial underpinnings of the economy, the Financial Times reported. China places a ceiling on deposit rates as a way of limiting competition among banks and to fortify the capital positions of institutions that had effectively been insolvent a decade ago.

Credit unions should pay into a new fund to help “stabilise” the sector, in which 27 institutions are in serious need of capital, a Government-appointed group has advised, the Irish Times reported. The Commission on Credit Unions, in its interim report, has also called for enhanced regulation of the movement, as well as a greater emphasis on internal audit and risk management. “The regulatory framework is not as well developed as in most mature credit union movements,” said commission chairman Prof Donal McKillop yesterday.

Anglo Irish Bank and lenders to the Quinn Group have agreed the terms of a deal to lower the debt on the business to €475 million from €760 million. The changes, which will be voted on by creditors, reduce the group’s annual interest bill to €40 million from €60 million. The Quinn Group is the industrial conglomerate formerly owned by Seán Quinn and his family. The fresh restructuring means that Anglo, a 75 per cent shareholder, will have more debt to be paid off before recouping value from the recovery of the group.

Denmark’s bank watchdog aims to complete its inspections of lenders at risk of insolvency by January, and expects most will fail its audit, Bloomberg reported. The Financial Supervisory Authority’s review covers lenders identified by the regulator as “risky” and “in seven out of 10 inspections, we insist on either higher writedowns or higher solvency requirements,” Ulrik Noedgaard, director general at the FSA, said in an interview.

Slovakia finally ratified new powers for the euro zone's rescue fund on Thursday, the last country to do so, clearing the way for a bolder effort to arrest Europe's sovereign debt crisis, which threatens global financial stability, Reuters reported. The vote came 10 days before a European Union summit called to approve a "comprehensive strategy" to fight the crisis, expected to include action to reduce Greece's debt burden, a plan to strengthen European banks and measures to stop contagion spreading to larger euro zone economies.

German bankers railed Thursday against European Union proposals that would force the Continent's banks to raise capital and further write down the value of Greek debt on their books, arguing that the moves themselves could force the sort of financial crisis that Europe's leaders are working to avoid, The Wall Street Journal reported. Deutsche Bank AG's chief executive, Josef Ackermann, cautioned Thursday that a credit crunch could result if Europe's leaders enact higher capital levels for banks and big haircuts on sovereign debt.

Beijing is not pleased with the signals that the market for Chinese bank shares is sending about bank fundamentals or the state of the economy. So it is doing what it usually does with information it doesn't like: Cover it up. Central Huijin, an arm of China's sovereign wealth fund that is in turn an agent of the State Council, has started buying the shares of Chinese banks listed in Shanghai and Hong Kong to pump up prices, The Wall Street Journal reported in a commentary. If Japan's "price-keeping operations" are anything to go by, this will only work for a short time.