Headlines

The European Central Bank signaled Thursday that it could raise borrowing costs as soon as next month in response to intensifying inflationary pressures. Such a move would be likely to lead soon to higher borrowing costs for homeowners and businesses, the International Herald Tribune reported. An interest rate increase would make the E.C.B. the first major central bank to raise rates in a bid to prevent the recent effects of higher oil and food prices from spreading into the broader economy.

New statistics released by InsolvencyJournal.ie show that 5 companies went out of business per day in February 2011. There was a 59% increase on the January figures with 153 companies going bust, compared to 96 in January. This is the second highest monthly total InsolvencyJournal.ie has recorded in its history (156 being the highest for December 2009.) Commenting on the figures, Ken Fennell, partner with kavanaghfennell, the firm who compile the data, said, “Although this month’s figures are high, they are in line with the rate of insolvencies for the same month last year.

European Union banking regulators agreed to begin so-called stress tests on the region's banks but said that details of how the tests will work are still being discussed, The Wall Street Journal reported. The results of the tests will be published in June, the European Banking Authority, the new pan-EU banking regulator, said in a statement after a board meeting. The tests will examine how well Europe's banks could withstand sharply higher loan losses, falling securities prices and other potential results of a sharp macroeconomic slowdown.

A Canadian judge has ruled that more than 200 former General Motors dealers who businesses were eliminated in a 2009 restructuring can sue the company as a group, the Associated Press reported. Ontario Superior Court Justice G.R. Strathy on Tuesday granted class action status to the lawsuit filed by more than 200 GM dealers whose franchises were eliminated during GM's financial crisis in 2009, according to a statement from two Toronto law firms representing the dealers.

The planned return to the air of carrier Mexicana de Aviacion suffered another setback Tuesday when the private-equity group that had secured agreements for a restructuring failed to come up with the capital to buy the shares from the current owners, Dow Jones Daily Bankruptcy Review reported. PC Capital said in a press release late Tuesday that the transfer of funds to buy Mexicana's holding company Nuevo Grupo Aeronautico, or NGA, wasn't made by the deadline set by current owner Tenedora K.

The chief executive of property developer CapitaLand Ltd.'s China unit said Tuesday that the country's latest measures to cool the property sector, including restrictions on home purchases and reduced land supply for private development, will most likely result in pent-up demand rather than lowering prices, The Wall Street Journal reported. Beijing is concerned about overheating in the real-estate market after months of rising home prices prompted widespread resentment over unaffordable housing.

Billionaire financier George Soros says the incoming government has a “legitimate” claim to impose bailout losses on senior bank bondholders and warns Ireland could be “dragged down” for years by Europe’s no-default policy, the Irish Times reported. Fine Gael and Labour each pledged during the election campaign to tackle senior bond investors. However, as they embarked on coalition talks, EU economics commissioner Olli Rehn ruled out any move in that direction.

Troubled music and books retailer HMV saw its chairman resign and its share price hit a record low yesterday after warning it would miss profit targets for the second time this year, The Scotsman reported. The company, which owns Waterstone's as well as a string of live music venues including The Picture House in Edinburgh, said trading had not improved since its last update in January when it warned that poor Christmas sales would leave profits at the lower end of market expectations.

Russian gas export monopoly Gazprom won the rights to a giant Siberian gas field destined to supply the fast-growing markets of China, a spokesman for the sale organiser said on Tuesday, Reuters reported. Victory at the auction will allow Gazprom to extract the field's 2 trillion cubic metres of reserves, enough to supply the world for eight months, and forge deeper ties with China, where the Russian energy giant plans to start exporting gas in 2015.

It’s March-madness season for European Union summitry as governments struggle to carve out a package of economic measures they hope will contain the region’s debt crisis, The Wall Street Journal Brussels Beat blog reported. From Friday’s gathering of center-right leaders in Helsinki through the March 24-25 European Council in Brussels, the upcoming meetings could reshape the EU–creating a more tightly integrated Euro-zone core with a new set of ties to non-euro nations.