Headlines

The European Central Bank (ECB) has given itself increased power to limit individual banks’ borrowing from its lending operations, The Irish Times reported. The bank changed its rules following an annual review, but made the move while talks are continuing about the need to tackle the dependency of some institutions on ECB funds. Five Irish banks, State-controlled Anglo Irish and AIB, and Bank of Ireland, Irish Nationwide and the EBS, will be seeking cash from the ECB in return for around €35 billion worth of bonds from State toxic assets agency, Nama.

Only months after two emergency rescues and a wrenching series of mergers among Spanish cajas de ahorros or savings banks, a second round of consolidation is being predicted by the country’s bankers, officials and financial analysts, the Financial Times reported. With Spain’s economy still stagnant after the global crisis and the collapse of the domestic housing bubble, commercial banks and unlisted cajas have been amassing unwanted real estate on their books, while bad loan ratios rise and the pie of profitable banking business continues to shrink.

Former Arcandor AG Chief Executive Officer Thomas Middelhoff’s home and office were searched yesterday as part of a probe into the company’s bankruptcy, Bloomberg reported. Bochum prosecutors are investigating about 20 people over Arcandor’s demise, Gerrit Gabriel, a spokesman for prosecutors, said in an interview today. Investigators raided premises at nine sites throughout Germany, he said. Cologne prosecutors are leading a related probe, he said.

Shinsei Bank is expected to become the financial adviser for the search of an investor for failed consumer lender Takefuji Corp, three people with direct knowledge of the matter said, Reuters reported. Takefuji last month filed for bankruptcy owing about $5 billion, making it the biggest Japanese consumer lender to fail since a court ruling in 2006 forced the industry to repay borrowers for excessive interest charges. Shinsei Bank's appointment will become official pending court approval, one of the people said. Read more.

Iceland’s banks may come under pressure to forgive about $2 billion in mortgage debt after protests this week prompted the government to consider proposals from the island’s homeowner protection group, Bloomberg reported. “The debt the banks have to write off could very well be very challenging for them,” said Economy Minister Arni Pall Arnason, in an interview in Reykjavik. “So be it. The banks have to acknowledge quickly that current debt levels are unrealistic and that timely write-offs are necessary.

Aer Arann looks set to be taken over by a group comprising its current owner Pádraig Ó Céidigh and an overseas listed company, The Irish Times reported. It is understood that the airline’s examiner is in the final stages of negotiations with the parties about a multi-million-euro investment package into the cash-strapped regional airline. This is likely to be presented to the High Court on Monday for approval. A scheme of arrangement would then be put to the company’s creditors. If given the green light, this investment would save up to 300 jobs at the ailing airline.

Strict curbs on bankers' bonuses could be made tighter from next year under new European Union proposals, Sky News Online reported. Measures due to be published within days by regulators in Brussels could mark the biggest clampdown yet on bankers' pay and go even further than plans by the UK's Financial Services Authority (FSA). The EU controls - which would be adopted by the FSA - are set to include a cap that would limit the amount of bonuses bankers get upfront to a maximum of 30%. Proposals on the table from the FSA would allow bankers to take up to 50% of payouts in cash.

Nortel Networks Corp. and its creditors have tapped former federal judge Layn R. Phillips to help divide nearly $3.2 billion raised in a series of bankruptcy sales, Dow Jones Daily Bankruptcy Review reported. Phillips is being called in to serve as a mediator as the former telecommunications giant completes the dismantling of its global equipment and service business, according to documents filed Wednesday in the U.S. Bankruptcy Court in Wilmington, Del. Mediation sessions have been scheduled to start Nov. 11 and run through Nov. 16, court documents say. Creditors in Canada, the U.S.

Britain's banks are set to accelerate the sale of distressed assets or portfolios of loans, restructuring experts said at a Reuters Summit this week. Royal Bank of Scotland, Lloyds and others are showing more interest in selling businesses or loans to shrink their balance sheets, especially as new capital rules will make holding them even more of a burden. "It's happening already," Matthew Prest, managing director at investment bank Moelis & Co said at the Reuters Restructuring Summit on Thursday.

Two wealthy investors have handed Adelaide carbon management firm Carbon Planet a $250,000 lifeline to move the company out of voluntary administration, AdelaideNow.com.au reported. Carbon Planet mangement took control of the company back from Korda Mentha today after creditors unanimously agreed for the company to continue operating under a Deed of Company Arrangement. He said the company had reduced its cash burn rate to $140,000 a month as it moved from creating to deploying its intellectual property.