Headlines

The world’s biggest banks are seeking to revive global efforts to create a resolution mechanism to deal with failing financial giants in a bid to stave off higher capital charges and other options that they say could damage their bottom lines, the Financial Times reported. The Institute of International Finance, a leading industry group, is lobbying to put the issue on the agenda when leaders of the G20 leading economies next gather. On Wednesday, IIF representatives are meeting French officials, who will host this year’s gathering in November, to press their case.

Five candidates, including midsized domestic non-bank financial institutions and foreign investment funds, are being considered for the role of rehabilitation sponsor for failed consumer lender Takefuji Corp, the Nikkei business daily reported. Candidates are to submit offer prices and final business plans by end February and the sponsor is expected to be finalized in March, the paper added. The five candidates have been selected from 14 in the first round of bidding in December through an examination of their submitted business plans, the business paper said.

The convoluted saga of debt-laden Australian shopping-center owner Centro Properties Group has taken yet another twist: Most of the banks set to decide Centro's fate by December have been replaced by hedge funds and other opportunistic investors, Dow Jones Daily Bankruptcy Review reported. Gone are most of the lenders that originated Centro's roughly $5.5 billion in unsecured debt coming due at the end of this year, having sold their positions in recent months.

The European Union’s proposal that senior note holders share the burden of future government bailouts is driving the cost of insuring the debt of rescued lenders to record highs, Bloomberg BusinessWeek reported. Credit-default swaps protecting bonds sold by Commerzbank AG, which has received 18.2 billion euros ($24 billion) from the German government, almost doubled this year, while contracts on Italy’s Banca Monte dei Paschi di Siena SpA jumped 35 percent to the highest ever as of yesterday, according to CMA.

The number of Scottish business failures in 2010 was up by a quarter, according to the accountants KPMG, the BBC reported. The firm said there were 1,109 corporate insolvency appointments in 2010, compared to 883 in 2009. However KPMG said there were signs the market was starting to level out with a fall in the number of appointments between October and December. At the end of 2010, appointments were down 10% compared with the previous three months. The figure was 3% lower than the same period in 2009.

Yesterday’s High Court decision dealt what may prove a fatal blow to McInerney’s bid to stave off receivership, but the warning bells have been ringing for the homebuilding firm for some time, the Irish Times reported in an analysis. At the height of the boom in 2007, McInerney, one of the country’s oldest homebuilders, had revenues in excess of €200 million and was expanding quickly. However, the collapse in the Irish property and construction sector hit its business hard. By 2008 it was in the red, posting a loss of €47 million. In 2009 it lost another €25 million.

New Zealand likely avoided a recession last year due to a recovery in business confidence led by exports, consumer spending and construction, economists say. A net 8 percent of companies surveyed expect the economy will improve over the next six months, up from 6 percent in the third quarter, the New Zealand Institute of Economic Research said today in Wellington, Bloomberg reported. Home-building approvals rose 8.8 percent to a four-month high of 1,268 in November, Statistics New Zealand said in a separate report.

Pensioners of insolvent forestry company Fraser Papers Inc. voted Monday to strike down the company's restructuring proposal, saying they could not accept a clause that would absolve the company from any legal wrongdoing, the Winnipeg Free Press reported. The Communications, Energy and Paperworkers Union, which represents about 1,900 active and retired employees in Ontario, Quebec and New Brunswick, says it and other major creditors, including the Superintendent of Pensions for New Brunswick, voted to reject the plan at a meeting Monday in Toronto.

The turmoil in the euro currency zone is intensifying ahead of a key Portuguese debt auction, The Wall Street Journal reported. A selloff in Portuguese debt Monday prompted the European Central Bank to intervene by buying the country's bonds, traders said. The ECB's move stabilized the bond prices of Portugal and other highly indebted countries on the euro zone's fringe.

Tasmania's largest private ambulance service is facing insolvency, ABC News reported. Ambulance Private's owner blames the State Government and says Ambulance Tasmania will need millions of dollars to pick up the thousands of patients his company transports every year. A State Government review in 2007 recommended Ambulance Tasmania stop outsourcing non-emergency patient transport to private companies and set up its own business unit. As a result, Ambulance Private's managing director David Watson says his company will go under within a week.