United Kingdom

Northern Rock Plc shareholders lost a court bid seeking compensation from the British government for stock they claim was rendered worthless when the U.K. bank was nationalized last year, Bloomberg reported. A three-judge panel at the Court of Appeal in London today threw out a lawsuit filed by hedge funds SRM Global, RAB Capital Plc and a group of private investors. They had sought a judicial review of the way the shares will be valued by the government. Northern Rock shares peaked at 1,251 pence in February 2007, and closed at 90 pence on Feb. 15, 2008, when they were suspended.

Strains in pensions systems, in both private and public provision, threaten to turn the financial crisis of the past two years into a social crisis lasting for decades, the Organisation for Economic Co-operation and Development warned on Tuesday. In its annual analysis of the health of pensions systems globally, the Paris-based organisation found private pension plans lost 23 per cent of their value last year, while higher unemployment “leaves little room for more generous public pensions”, the Financial Times reported.

The Chinese government’s largest investment ever in a Western company, a proposed $19.5 billion stake in the Australian-British mining giant Rio Tinto Group, collapsed early Friday, dealing a blow both to China’s global corporate ambitions and to its efforts to gain clout in the natural resources market, The New York Times reported. The board of Rio Tinto announced the decision after meeting in London on Thursday, saying the company had ended the deal it struck in February to sell the stake to China’s state-owned Aluminum Corporation of China, also known as Chinalco.

Shares in British banks fell on Thursday after it emerged that the economic assumptions used to test whether some of the biggest institutions could withstand a deep recession may have been less severe than assumed in financial markets, the Financial Times reported. The Financial Services Authority, the City of London watchdog, published details of the worst-case economic scenarios used to test the capital strength of banks including Royal Bank of Scotland, Barclays and Lloyds.

London or Paris may become the hub for the resolution of dozens of lawsuits related to banks’ and investment funds’ exposure to Bernard Madoff’s Ponzi scheme, Luxembourg’s Treasury and Budget Minister Luc Frieden said. The nation’s courts have dealt with more than 20 lawsuits and will get hundreds more in the coming months from investors seeking compensation from banks, funds and auditors for losses.

Standard and Poor's grim warning on the British economy is as much an indictment of the political landscape in London as the perilous state of the public finances, according to newspapers, Agence France-Presse reported. An editorial in the Financial Times described the verdict as "dramatic", but said the signs had all been there for some time. The business daily said the biggest risk hanging over recession-hit Britain was political, warning there was a "credibility hiatus" caused by the anticipation of an election, which must be held by June 2010.

Cevdet Caner, the man at the center of Germany’s biggest real estate insolvency in 15 years, is fighting eviction from his 20 million pound ($31 million) London townhouse, complete with basement swimming pool, Bloomberg reported. His group of investment companies called Level One owes €1.5 billion ($2 billion) to creditors led by Credit Suisse Group AG, according to estimates by the German administrator. The two main holding companies defaulted and were placed under court administration in August, U.K.

The U.K. Treasury will call for faster payments to creditors and greater clarity on trades in the event an investment bank collapses, an effort to overhaul insolvency law after the demise of Lehman Brothers Holdings Inc., Bloomberg reported. Investors will have more protection and information to determine the legal position of outstanding trades once liquidators have been called in. The proposals to reshape insolvency rules were published in London yesterday, forming the basis for a formal consultation later this summer. The U.K.

The African Development Bank is seeking to triple its capital base to accommodate surging demand for emergency loans from African states and businesses hit by falling export income and sharp declines in foreign investment and remittances. Donald Kaberuka, the AfDB’s president, will put the plans to the bank’s annual general assembly in Dakar this week in one of the first tests of developed countries’ commitments to financing an economic rescue package for Africa.

Russian miner Norilsk Nickel, the world's largest nickel producer, is seeking to reschedule debts linked to the 2007 takeover of Canada's LionOre, London's Independent on Sunday reported. Norilsk declined to comment when contacted by Reuters after the newspaper reported it "is looking to ease the terms of the loan taken out on its $6.4 billion purchase of Canadian rival LionOre in 2007". The London offices of investment banks Rothschild and Lazard have been approached by Norilsk to help "sort out its debt difficulties", the Independent on Sunday reported.