Headlines

Italy's tax police said Tuesday it raided 76 branches and offices of Swiss banks based in Italy and close to the border of San Marino, Dow Jones reported. In a joint e-mailed statement, the Italian tax police and Italy's tax agency said that the inspections were carried out in order to see if banks and their agents had provided prompt communications on their clients' accounts. The Italian tax police said that hundreds of police and tax officers made inspections Tuesday.

Administrators of Bahrain-based The International Bank Corporation (TIBC), owned by the heavily indebted Algosaibi Group, say they are confident they can repay creditors as doubts persist whether there are enough assets to meet obligations, Reuters reported. TIBC, owned by Saudi group Ahmad Hamad Algosaibi & Bros (AHAB), plays a key role in the corporate debt defaults of AHAB and Saad Group, involving an estimated $22 billion in obligations.

Shares in state-controlled European banks have slumped since Monday's forced restructuring of ING Groep -- particularly the U.K.'s Lloyds Banking Group and Royal Bank of Scotland, The Wall Street Journal reported. Reading off ING, investors may be right to fear the worst for RBS. Lloyds is likely to be different. The EU is under pressure to be softer to avoid embarrassing the U.K. government, which waived competition rules to engineer Lloyds's acquisition of HBOS. The U.K.

The Blue Mountain Lumber mill in Otago is closing, with the owner citing the high New Zealand dollar and a fall in domestic demand as the reasons, The National Business Review reported. The mill at Conical Hill near Tapanui is owned by Winstone Pulp International (WPI), itself a subsidiary of Malaysian company Ernslaw One Ltd. At a meeting of staff today WPI managing director David Anderson said there was regrettably no option left other than to close. The mill was originally built in 1949 by the state-owned Forest Service.

The Japanese government is aiming to come up with a blueprint for bailing out Japan Airlines Corp as early as this week, but several hurdles stand in the way of a final solution to the carrier's many problems. In a special report, Reuters considers questions and answers about JAL's troubles and how the government may go about injecting public funds. JAL is Asia's largest airline by revenue. Read more.

ING Groep NV will become a mainly European bank following the dramatic overhaul of its business announced Monday, which includes spinning off its insurance activities and raising €7.5 billion in a rights issue, Dow Jones reported. "ING will be a dominant mortgage, savings and commercial bank in the Benelux and other parts of Europe, but also will keep its presence in growing Asian markets like India and Thailand," Chief Executive Jan Hommen told reporters. As part of a plan to satisfy E.U.

India’s central bank took the first step toward withdrawing its record monetary stimulus as inflation pressures build, ordering lenders to keep more cash in government bonds, Bloomberg reported. Stocks fell the most in two months after the statement spurred speculation the Reserve Bank of India will boost borrowing costs by year-end, eroding corporate profits. Today’s shift also signals intensifying global concern about consumer and asset-price increases, with Norway tomorrow forecast to follow Australia in raising rates this month.

The effects of the financial crisis are likely to linger for the next two years, making fiscal policy "incredibly difficult" for the new government, Germany's Chancellor Angela Merkel said Monday, The Wall Street Journal reported. Ms. Merkel defended the center-right coalition's program of cutting taxes despite high levels of public debt. "We have chosen a path ... banking fully on growth, which is no guarantee that it will work but it offers the chance that it might," she said. Focusing purely on spending cuts wouldn't provide a chance to get out of the crisis, she said.

BMW has become the first major company in Germany to change its compensation practices amid growing concern over excessive banker bonuses, Spiegel Online reported. The company cited a fairer work environment as its reason. Other firms are sure to take notice, given BMW's size and weight in the global business market. BMW plans to tie executive bonuses to those of its blue-collar workers, in a bid to create a fairer and sustainable compensation environment within the company.

The Czech government Monday decided to cancel the sale of flag carrier CSA Czech Airlines to a Czech-Icelandic consortium, citing a range of concerns, and will instead continue restructuring the company, Dow Jones reported. The airline's pilots last week agreed to a 30% pay cut in return for the resignation of carrier's management team. The airline's new boss is the head of the Prague airport.