Banks, Europe | featured news

Spain's government tried to plug a gaping hole in the country's banking system on Friday, but the fourth such attempt to tackle the fallout of a property crash fell short of expectations.

Spain's latest credit rating downgrade has thrown into sharp relief the need to revive a banking sector that could need another 100 billion euros to cover bad debts in order to avoid exposing another weak flank in the euro zone crisis.

The World Bank is moving to prop up the European banking system in response to the crisis in the region, echoing the steps it took during the 2008 world crisis and reflecting heightening fear that the euro’s problems are starting to crimp the global economy.

Dutch financial services group ING is to cut 2,700 staff and contract jobs, it said on Thursday in announcing third-quarter results, slashing the headcount at its Dutch retail banking operations by 10 percent in the face of deteriorating markets.

The Wall Street firm run by former Goldman Sachs Chairman and New Jersey Gov. Jon Corzine filed for bankruptcy Monday morning, making it the first big American casualty of the European debt crisis.

A top bank lobbyist insisted Saturday that banks and the eurozone are far from reaching a deal to cut Greece's debt, despite claims by eurozone finance ministers that they will ask banks to take steeper losses on their Greek bonds.

The European Commission seized documents from several major banks on Tuesday, marking the intensification of a world-wide law-enforcement probe into how key interest rates are set, the Wall Street Journal said, citing people familiar with the situation.

The leaders of Germany and France, the eurozone's two biggest economies, say they have reached agreement on strengthening Europe's shaky banking sector.

The head of Swiss banking giant UBS Oswald J. Gruebel has resigned in the wake of a $2.3 billion loss in unauthorized trading, the bank announced Saturday.

A decision by European central banks to support the region's financial system helped calm Asian markets, setting off a rally across the region in Friday trading....