An arcane system at the heart of a global investigation into whether banks colluded in setting interest rates may endure simply because it is so deeply embedded in trillions of dollars' worth of financial contracts, Reuters reported. The London Interbank Offered Rate, known as Libor, is a daily poll that asks a group of banks at what rate they think they will be able to borrow. The rate is supposed to reflect the level at which banks lend to one another.

It’s hard to tell sometimes who is calling the shots at the Royal Bank of Scotland: management or politicians, The New York Times DealBook blog reported. When Britain bailed out the financial firm in 2008 and took a majority stake, the government promised to remain a passive investor. But some employees and analysts now say the line has blurred, as politicians push the bank to rein in executive compensation, bolster lending and limit risky businesses.

The cost to pension industry of the Bank of England's latest round of quantitative easing could total 90 billion pounds ($141 billion), diverting company cash away from investment in the economy in order to plug retirement fund deficits, the industry warned on Thursday, Reuters reported. Quantitative easing (QE) depresses the yield on government bonds, known as gilts, a staple investment for pensions funds, making it more expensive to pay for future liabilities, the National Association of Pension Funds (NAPF) said.

UK regulators and global banks are discussing a potentially far-reaching overhaul of the calculation and regulation of interbank lending rates, amid claims that the benchmark for $350tn contracts worldwide may have been subject to manipulation, the Financial Times reported. The review comes as regulators in North America, Europe and Japan have expanded their year-long probes into alleged manipulation of the London Interbank Offered Rates, and other benchmark lending rates, which help set the price of financial products, including mortgages and credit cards.

Manufacturers reported further growth in February and, despite a slight slowdown, the sector's recovery is reducing the need for more stimulus from the central bank as the economy is slowly moving out of the danger zone, Reuters reported. Some Bank of England policymakers, including Governor Mervyn King, this week played down the likelihood of another cash boost, and news that the sluggish housing market is gaining a touch of momentum bolstered views that February's 50 billion pound cash injection may have been the last.

More than half of Britain’s banks expect a rise in the number of companies defaulting on their loans this year amid warnings that financial houses are going on a lending “diet” and won’t be able to drive the economic recovery, Scotsman.com reported. Businesses looking to borrow more money or refinance their loans face “much tougher” conditions being imposed by the banks, according to a report published today.

State-owned Royal Bank of Scotland is expected to pay out up to 400 million pounds in bonuses to its corporate banking staff as it gets ready to unveil a full-year loss forecast at up to 1.2 billion pounds on Thursday, Reuters reported. The move is expected to increase anger that the bank is still paying large salaries while thousands, including more than 30,000 layoffs at the bank in the last three years, lose their jobs in a weakening global economy.

Hellas Telecommunications Luxembourg II SCA filed for Chapter 15 bankruptcy to put on hold certain lawsuits pending against the company in New York State Supreme Court, Bloomberg Businessweek reported. The company, based in London, listed both debt and assets of more than $100 million in documents filed today in U.S. Bankruptcy Court in Manhattan. Chapter 15 protects foreign companies from U.S. lawsuits and creditor claims while a company reorganizes abroad. Hellas Telecommunications Luxembourg is asking the U.S.

British refinery Coryton will continue to operate for at least three more months after Marcel Van Poecke, a co-founder of insolvent owner Petroplus, teamed up with Morgan Stanley and investor KKR to provide fresh crude supplies, Reuters reported. Coryton is the most coveted asset of the five refineries owned by Petroplus around Europe, traders and analysts say. It has been running at half capacity since banks stopped financing Petroplus in late December.

Top banks fell short of their government targets to lend to small businesses last year, official data showed on Monday, dealing a blow to the Conservative-led coalition's hopes of removing a barrier to economic recovery, Reuters reported. The "Project Merlin" deal had obliged banks to meet fixed lending targets in recompense for state aid during the financial crisis, and banks' failure to meet their goal will raise pressure on the government to toughen its stance on the sector.