Headlines

The Bank of England sought to clarify its rules regarding the order in which shareholders and creditors should bear losses in the event of insolvency, in the wake of the controversial write-down of Credit Suisse Group AG’s riskiest bonds, Bloomberg News reported. The central bank said in a statement on Monday that additional tier 1 instruments, the securities rendered worthless as part of the UBS Group AG takeover, rank ahead of common equity tier 1 (CET1) and behind tier 2 (T2), a mix of reserves, hybrid instruments and junior debt.

The European banking system is well-equipped with capital and the probability of contagion due "very small", ECB's policymaker Yannis Stournaras said on Monday. "We don't see substantial vulnerabilities. So, the probability of contagion is very small today. The banks are well capitalised," Greek central bank chief Stournaras said. Stournaras added that Europe has all the instruments ready, if needed, to intervene.

Bankrupt crypto exchange FTX on Sunday sued the liquidators overseeing the wind-down of its Bahamian affiliate FTX Digital Markets, accusing them of wrongly claiming ownership of the exchange's assets, Reuters reported. FTX's U.S. based bankruptcy team, led by new CEO John Ray, said in its lawsuit that the liquidators were laying claim to FTX.com’s cryptocurrency, intellectual property, and customer relationships. FTX called FTX DM a "fraudulent enterprise", initially set up only to be a "local service company", which did not own the FTX.com exchange or any of the cryptocurrency seized.

Sri Lanka's foreign private creditors are considering proposing swapping the country's defaulted bonds for new securities where cash flow is linked to its economy's future growth, Retuers reported. Such bonds, known as state-contingent debt instruments, would be designed to automatically adjust variables such as coupon payments and maturities if the island nation's economy underperforms. The GDP-linked bonds would be based on International Monetary Fund's projections for Sri Lanka's economy. The latest IMF forecasts see it progressing from a 3% contraction in 2023 to a 3.1% growth in 2027.

Inflation of more than 100% in Argentina is erasing the advantage the country’s top companies used to have by booking revenue in US dollars, Bloomberg News reported. Investor darlings in the energy sector — natural gas and power producer Pampa Energia SA, pipeline operator TGS SA, and state-run oil driller and refiner YPF SA — are struggling with costs that are coming under pressure from rising prices, which surpassed 100% on an annual basis last month. In the past, Argentine energy companies could compensate for inflation on their balance sheets through revenues linked to the US dollar.

Vietnam Prime Minister Pham Minh Chinh urged banks to provide cheaper loans with longer terms to attract foreign investors to develop green power projects in the country, Bloomberg News reported. Vietnamese ministries also need to sit down with wind and solar energy investors to understand their difficulties and losses in order to find a “harmonious” pricing mechanism for both buyers and sellers, Chinh said at a Hanoi conference Sunday. Renewable energy companies on Mar.

German retirees' pensions will rise significantly this summer for the second consecutive year, the government said Monday, though the increase will still fall short of the current inflation rate, the Associated Press reported. The Labor Ministry said pensions will increase by 4.39% in the former West Germany on July 1 and by 5.86% in the formerly communist east. That will follow increases last year of 5.35% in the west and 6.12% in the east. Rises in German pensions are linked largely to wage developments.

Colombia’s ambitious overhaul of its pension system will create a major new player in the local market and shore up demand for the nation’s bonds, according to Finance Minister Jose Antonio Ocampo, Bloomberg News reported. The pension bill that will be sent to congress this month will give birth to a savings fund that can invest in local debt, Ocampo said, in a wide-ranging conversation that also touched on his own future, as well as this month’s central bank decision.

EU regulators are likely to open investigations into tax deals between EU countries and multinationals after reviewing their arrangements in the previous decade, the bloc's competition chief warned on Monday, Reuters reported. European Commission Vice-President Margrethe Vestager, who has ordered Apple to pay 13 billion euros in back taxes in Ireland and Amazon 250 million euros to Luxembourg, among a dozen cases, has said such tax deals amount to illegal tax breaks. Despite her crackdown, Vestager said aggressive tax planning "is still with us".

Some of the world's largest central banks came together on Sunday to stop a banking crisis from spreading as Swiss authorities persuaded UBS Group AG on Sunday to buy rival Credit Suisse Group AG in a historic deal, Reuters reported. UBS will pay 3 billion Swiss francs ($3.23 billion) for 167-year-old Credit Suisse and assume up to $5.4 billion in losses in a deal backed by a massive Swiss guarantee and expected to close by the end of 2023. Soon after the announcement late on Sunday, the U.S.