Headlines

Banks dealing with people in mortgage arrears will be able to use the minimum income guidelines to be applied by the insolvency service to force distressed mortgage holders to dramatically curtail their spending on essential items such as medical care, it has been claimed, the Irish Times reported. Speaking last night, Fianna Fáil finance spokesman Michael McGrath called for the minimum income guidelines of the Insolvency Service of Ireland (ISI) to be published without delay.

Big depositors at Cyprus' largest bank may be forced to accept losses of up to 60 percent, far more than initially estimated under the European rescue package to save the country from bankruptcy, officials said Saturday, the Associated Press reported. Deposits of more than 100,000 euros ($128,000) at the Bank of Cyprus will lose 37.5 percent in money that will be converted into bank shares, according to a central bank statement. In a second raid on these accounts, depositors also could lose up to 22.5 percent more, depending on what experts determine is needed to prop up the bank's reserves.

A multicolored stack of shipping containers stuffed with goods intended for Cypriot stores towered over this island nation's largest seaport—a monument to the country's financial paralysis, The Wall Street Journal reported. In normal times, thousands of tons of cargo speed through the sprawling complex here every week, feeding Cyprus's import-hungry economy. But with the country's banking system on life support, the cargo network has shuddered to a halt.

The head of South Korea's recently-launched debt restructuring fund said Sunday that it will buy debts held by financial companies just one time, shrugging off worries that repeated help could lead to moral hazards among delinquent borrowers, the Global Post reported on a Yonhap News Agency story. On Friday, the government launched the National Happiness Fund in order to buy debts held by local financial companies, a move aimed at pushing for debt write-offs or debt rescheduling for delinquent borrowers.

Property developer Sean Dunne has listed several of the country's main banks as creditors in a bankruptcy filing made in the state of Connecticut in the United States, the Irish Times reported. The former property tycoon names State-owned AIB, Bank of Ireland and Ulster Bank among more than 30 creditors listed in the court records filed late on Friday. Mr Dunne estimated his liabilities at between $500 million (€390 million) and $1 billion (€780 million) and his assets at $1 million and $10 million in the court bankruptcy filing.

Argentina may learn at any time whether a U.S. appeals court will rule that it must pay $1.4 billion to holders of its defaulted debt, something the South American country has resisted for more than a decade, Bloomberg reported. The court in New York is set to rule after Argentina submitted a payment proposal last week that would force holders of defaulted bonds to take a steep discount on debt the nation repudiated in its record 2001 default on $95 billion. With further appeals unlikely to succeed, the ruling may be the last word on the matter.

Italian real estate management company Prelios said on Wednesday it approved a 561 million euro ($717 million) debt restructuring plan, as well as a 185 million euros capital increase, Reuters reported. The heavily indebted company manages properties in Italy and Germany and has been hit hard by writedowns on real estate investments in its recession-hit home market. Prelios said its net loss for 2012 was 241.7 million euros, compared to a loss of 289.6 million euros in 2011, as a result of real estate writedowns and restructuring costs.

Cyprus’s banks reopened from a nearly two-week hiatus on Thursday with no sign of disorder among depositors, while the country’s politicians pointed fingers over who was to blame for the financial sector’s meltdown, The Wall Street Journal reported. Small groups of account-holders—typically numbering two dozen or less, and mostly retirees—pressed to enter the banks as they formally reopened at noon local time.

Russia's largest banks said Thursday their clients' exposure to losses in Cyprus so far appears modest, while there were few other signs of immediate fallout for Russian business, executives and analysts said, The Wall Street Journal reported. The Kremlin's angry public attacks last week on a planned tax on bank deposits in a tax haven long favored by Russians led many observers to suspect Russians' exposure to Cyprus's troubled banks was substantial. Estimates ran as high as €20 billion ($26 billion) in Russian money said to be at risk.

Japan’s central bank governor has told parliament that the government’s vast and growing debt is “not sustainable,” and that a loss of confidence in state finances could “have a very negative impact” on the entire economy, the Financial Times reported. The warning comes as Shinzo Abe’s administration attempts to drag Japan out of more than a decade of deflation with aggressive monetary and fiscal stimulus.