Headlines

China has required some small- and medium-sized banks to deposit more reserves at the central bank to rein in inflation and aggressive loan growth, the state-run China Securities Journal reported today, citing unnamed sources. The report said the punitive increase in banks' reserve requirement ratio, which took effect earlier this week, was mainly targeted at China's regional banks. But the report didn't name any banks. Though China has yet to announce an official lending target for this year, it has used various monetary tools to tame credit growth and inflation.

The man likely to be Ireland's next prime minister said the government should wait until a round of stress tests on the country's banks has been completed before recapitalizing them, expressing concern that they may still have a "black hole" on their balance sheets, The Wall Street Journal reported. In an interview, Enda Kenny said it would be "prudent and realistic" to wait until the stress tests had been completed "to see if there is another black hole in the banks" before they receive any new capital injections. Mr.

Permanent TSB’S decision to introduce immediate increases of between 2 and 3 per cent on its fixed interest rates for existing mortgage holders rolling off fixed or discounted rates has been described as “shocking”, the Irish Times reported. The bank announced last night it was increasing its two-year fixed term rate from 5.25 per cent to 7.25 per cent while the five-year fixed rate will go from 5.75 per cent to 8.75 per cent. A 10-year fixed rate will increase from 6.1 per cent to 9.1 per cent.

Now that it has passed Japan to become the world’s second-largest economy after the United States, China is considering the next step as a world power: making its money a global currency, the International Herald Tribune reported. No one expects that to happen immediately. And even the Chinese government is wary of making some of the free-market moves that would enable the renminbi to take its place alongside the dollar, euro and Japanese yen as a fully convertible reserve currency. Still, over the last year Beijing has begun to gradually loosen its tight currency controls.

EU approval was required to “telescope” the EU-IMF bailout of the banks and the Central Bank’s next set of stress tests into one announcement at the end of March, according to Minister for Finance Brian Lenihan, the Irish Times reported. Mr Lenihan postponed further injections of up to €10 billion into Bank of Ireland, Allied Irish Banks and the EBS building society until after the general election so they can be agreed by the new government.

Ailing German lender Hypo Real Estate (HRE) should be wound down, a German expert commission has recommended, two sources familiar with the matter told Reuters on Wednesday. "The experts can see only slim chances that a privatisation of HRE would become a success," said one of the people with knowledge of a report drafted on behalf of the German government by the expert commission. Due to overcapacity in the markets where nationalised mortgage lender and state financier HRE is active, the experts concluded that a sale would not yield higher proceeds than a liquidation, the source added.

Big-name bidders are circling a $640 million portfolio of soured Spanish commercial-real-estate loans, the latest sign of how private-equity firms are still trying to take advantage of the property bust even as the global economy recovers, The Wall Street Journal reported. Morgan Stanley, which is handling the sale for Royal Bank of Scotland Group PLC, received a handful of initial proposals at the end of last week, a person familiar with the situation said Tuesday.

Real estate developers are moving out of Nairobi to smaller towns, aiming to tap rising demand for residential houses that the high cost of land in the Kenyan capital has left unmet and adding a new dimension to property market growth, Business Daily Africa reported. Latest market data indicates that there has been a marked upsurge in construction of new housing units in Naivasha, Kisumu, Mombasa, and Nakuru – a trend that is expected to ease demand pressure on Nairobi and help tame price inflation.

Bank of Scotland said yesterday it was prepared to restructure the debt of buy-to-let borrowers in Ireland who have fallen deep into negative equity although it said it would only do so in exceptional circumstances, the Irish Times reported. The property crash has left many small-scale property investors in serious financial difficulty as they cannot meet their mortgage repayments or sell their properties for anything close to the sums they paid for them.

The European Union is starting to use new financial oversight powers to ensure that banks don't return to the risk pay policies that prevailed before the financial crisis, EU financial services chief Michel Barnier said in an interview, The Wall Street Journal reported. The exercise will be a key test of the EU's pledge to crack down on the bank-bonus culture that is widely blamed for encouraging bankers to take large short-term risks at the expense of longer-term financial stability.