Headlines

In an interview with the left-leaning German daily Die Tageszeitung published Thursday, Simon Johnson, former chief economist of the International Monetary Fund, described Deutsche Bank CEO Josef Ackermann as "one of the most dangerous bankers in the world," Spiegel Online reported. Johnson singled out Ackermann's famous target of a 25 percent pretax return on equity for particular criticism. He said such returns were only possible because Ackermann knows that Deutsche Bank is too big to fail and that it would be "rescued by taxpayers" if it was faced with bankruptcy.

Europe's struggling periphery is bracing for another blow to its already grim economic growth prospects, this time from the soaring euro, which touched a 15-month high against the dollar on Wednesday, The Wall Street Journal reported. The euro's rise, which makes products from the single-currency zone more expensive in global markets, will affect exporters throughout the 17-member currency bloc—particularly with global trade set to slow dramatically this year. The euro is almost 10% higher against the U.S. dollar since the start of the year, and 4% higher against the British pound.

In a dramatic illustration of the upheavals in Ireland following the crash of the Celtic Tiger, the nationalised Anglo Irish Bank announced Thursday that it had seized control of the Quinn Group from ex-billionaire Seán Quinn and his family, Finfacts reported. Seán Quinn, Ireland's once richest man, built up a conglomerate originally from quarrying and later he moved into cement and glass production.

A rift has emerged within government over an International Monetary Fund condition to freeze civil servants’ salaries for three years — pitting the Public Service Ministry against the Treasury, Business Daily Africa reported. The tussle, if unresolved, looks set to trigger labour unrest since the condition has also been opposed by the Kenya Civil Servants Union, which has taken the government to court for non-payment of salary increments agreed on in 2008. It may also lead to conflict within the grand coalition.

The mediation process related to the allocation of proceeds from the sale of Nortel Networks Corp.'s various assets has ended "without resolution," potentially delaying distributions to claimholders, Nortel said Wednesday, Dow Jones Daily Bankruptcy Review reported. The Canadian company, which filed for Chapter 11 protection in 2009 and has been shedding its assets in bankruptcy court, said delays in resolving allocation and intercompany claims matters "could be significant." The former telecommunications giant didn't elaborate on the latest developments in the mediation process.

When the details of Portugal’s rescue package are announced next month, pay attention to the economic growth assumptions that are negotiated between the European authorities, the International Monetary Fund and the Portuguese government, the Real Time Brussels blog reported in an analysis. If the loan package for Greece is any guide, the EU and the IMF tend to be too optimistic about growth prospects in countries that are about to slash spending and raise taxes in the face of already-high unemployment.

Chinese banks may have to raise about 860 billion yuan ($131 billion) of stock over six years to meet stricter capital rules, according to estimates from the industry regulator, a person with knowledge of the matter said, Bloomberg reported. Lenders are likely to need an additional 1.26 trillion yuan in supplementary capital by the end of 2016, the person said, declining to be named because the calculations aren’t public. The estimates, compiled in January, assume economic growth of 8 percent a year and 15 percent credit expansion, the person said.

The number of British companies in serious financial distress soared in the first quarter with restaurants, professional services businesses and the leisure industry in particular difficulty, a report showed, Reuters reported. Begbies Traynor, a corporate recovery company that helps wind up or restructure firms, said its Red Flag Alert database showed 186,554 UK businesses were facing significant or or critical problems in the first three months of this year.

AIB would consider writing off debts for some mortgage holders who cannot repay loans as a long-term way of resolving problem cases, the bank’s executive chairman David Hodgkinson said. Debt forgiveness was one option being considered, the bank said, as it posted a record loss of €10.4 billion for 2010 and unveiled plans to shed more than 2,000 staff – one in seven jobs at the bank, the Irish Times reported. Mr Hodgkinson said there was a range of possibilities for distressed borrowers, including a reduction on repayments by extending a loan period or writing off some debt.

Debt has forced a major Australian vegetable grower of tomatoes, capsicums and zucchinis into receivership, The Australian reported. Barbera Farms employs more than 500 people and grows produce at Bundaberg and Childers in southern Queensland and Bowen in the state's north. The receivers, Justin Walsh and Chris Munday, partners at accounting firm Ernst & Young, expect the farm will sell within months.