British fashion retailer Republic became the latest casualty of the economic downturn on Wednesday, seeking protection from creditors and putting around 2,500 jobs at risk, Reuters reported. The firm, which operates 121 stores across the UK with a stronger presence in the north of the country, has appointed administrators Ernst & Young to sell the business while it continues to trade. Republic is owned by private equity firm TPG. Ernst & Young said the retailer had been hit by poor autumn trading and a rapid decline in sales in late January.

Britain's plan to safeguard retail banking is a far better idea than the U.S. approach of forcing banks to hive off speculative trading, the Bank of England's next governor told MPs, Reuters reported. Mark Carney is to take up the reins in July, three months after the central bank becomes Britain's main regulator for lenders. In the wake of the financial crisis, regulators are introducing measures to shield the deposit-taking business of big banks from high-risk practices, reducing the prospect of a big failure that could destabilise markets and force a government bailout.

A complex restructuring plan for Punch Taverns, the debt-laden landlord group that owns almost one in 10 British pubs, is likely to face criticism from senior bond holders who doubt the company's claims that it will create a "sustainable capital structure", The Guardian reported.

British banks that fail to shield their day-to-day banking from risky investment activities could be broken up, Chancellor George Osborne said on Monday, bowing to political pressure to come down harder on reckless lenders, Reuters reported. European countries are retooling their financial systems to prevent a repeat of the 2008 financial crash, trying to strike a balance between popular calls for banks to be reined in and warnings that too tight a leash will choke off recovery.

Big-name London hedge funds Odey Asset Management and Egerton Capital are among those upping their bets against Monte dei Paschi di Siena in recent days, after revelations the troubled Italian bank faces heavy losses, Reuters reported. Italy's third-biggest bank is under investigation for an opaque series of derivatives and structured finance contracts between 2007 and 2009 that could cost it 720 million euros.

George Osborne has told Royal Bank of Scotland that it must meet its fine to US authorities over the Libor scandal – estimated to be in the region of £300m – from past, present and future bonuses, the Financial Times reported. RBS, which is 82 per cent taxpayer-owned, will discover the extent of its fines next week in a settlement with US regulators and the Financial Services Authority. Estimates of the total fines to US and UK authorities range from £400m-£500m.

European leaders criticized U.K. Prime Minister David Cameron's promise to renegotiate his country's relationship with the European Union and let the British people vote on the outcome, creating potential hurdles to his plan, The Wall Street Journal reported. "The EU does not need unwilling Europeans," said Mario Monti, Italy's prime minister and a former European commissioner, during a speech at an annual meeting of political and business leaders in Davos, Switzerland. "We need more, not less integration," German Foreign Minister Guido Westerwelle said separately.

Prime Minister David Cameron plans to let the British people vote on whether or not to stay in the European Union, a surprise move critics say will inhibit trade and cast a new shadow over the troubled bloc, The Wall Street Journal reported. Mr. Cameron planned to say in a public address that, if elected in 2015, a Conservative government would renegotiate the U.K.'s relationship with the EU, and then hold a referendum on the new settlement in the first half of its five-year parliamentary term.

Hilco UK, the retail restructuring group, has acquired the bank debt of HMV, effectively giving it control and paving the way for a rescue of the entertainment retailer that fell into administration last week, the Financial Times reported. People familiar with the situation said Hilco had acquired the debt from the group’s lenders, Lloyds and Royal Bank of Scotland for about £40m. HMV had underlying net debt of £176m as at the end of October, although people familiar with the matter said this had fallen to about £120m following the crucial Christmas and new year trading period.

More companies are expected to default on their debt this year, with UK retailers deemed the most vulnerable, according to new research, the Financial Times reported. A survey of the restructuring industry – published just days after HMV and Blockbuster became the latest high-street chains to collapse – indicates that the retail sector will be no more resilient in coming months.