Italy's Monti quits party as budget opposition mounts

ROME (Reuters) - Former Prime Minister Mario Monti on Thursday left the party he founded this year as political tensions over Italy's 2014 budget raised a new threat to the stability of Enrico Letta's government.

A year on, Mario Draghi's 'save the euro' pledge remains untested

FRANKFURT: A year after Mario Draghi vowed to do "whatever it takes" to save the euro, the European Central Bank president can claim to have staved off disaster - but he may have to back up his words with action before long.

Spain's bad bank pricing to favour lenders over investors

MADRID: Spain's so-called "bad bank" is planning to take over soured property assets from struggling lenders at a modest additional discount to book value in order to protect struggling banks from further losses, three senior banking sources told a news agency.

Spanish bailout stance to dictate demand

(Reuters) - A Spanish bond sale next week will be a gauge of investor confidence in euro zone policymakers' latest efforts to defuse the region's debt crisis, with markets on the lookout for signs of stronger demand.

New rate-setter backs austerity, reserves view on QE

LONDON (Reuters) - New Bank of England policymaker Ian McCafferty took a cautious line on the need for another cash boost to the recession-hit British economy, saying his decision would hinge on a clearer view of the economy's health.

IMF backs Draghi; says Spain, Italy have done enough

(Reuters) - The International Monetary Fund on Sunday strongly backed the European Central Bank's plan to staunch the euro zone debt crisis with unlimited bond purchases, saying it was ready to get involved in designing and monitoring its implementation.

Don't let euro zone debate turn nasty: German foreign min

(Reuters) - German Foreign Minister Guido Westerwelle on Monday warned politicians to rein in the language they use about the euro zone debt crisis after a weekend of ugly exchanges in the German press over Italy and Greece.

S&P cuts, affirms Italian banks in sweeping changes

MILAN/NEW YORK (Reuters) - Ratings agency Standard & Poor's on Friday downgraded a broad swath of Italian banks, citing worries that the recession in the euro zone's third-largest economy could mean mounting losses for the country's lenders.

EU watchdog warns banks still face major challenges

(Reuters) - The European Banking Authority said there remained significant challenges ahead for Europe's banks having just cleared the first hurdle to bolster their capital buffers.

Greece pressures euro, investors seek safety

LONDON (Reuters) - The euro neared a three-month low and safe-haven German bonds and the Japanese yen rose on Wednesday as political disarray in Greece and the rising costs of fixing Spain's banks fueled fears the euro zone debt crisis would take a sharp turn for the worse.

UK banks take over €37bn in ECB loans

British banks have taken more than €37bn (£31bn) of cheap loans from the European Central Bank following last week's dash by European banks to bolster their depleted reserves .

Gold eases on firm dollar, euro zone fear

SINGAPORE (Reuters) - Gold prices lost more than half a percent on Monday, after the momentum that pushed prices up 3 percent last week fizzled as the dollar firmed with growing worries about the euro zone debt crisis.

Beefed up euro zone fund unlikely to succeed

If as Albert Einstein observed insanity is “doing the same thing over and over again and expecting different results,” then the latest proposal for resolving the euro zone debt crisis requires psychiatric rather than financial assessment.

The sketchy plan entails Greece restructuring its debt with writedowns around 50 per cent and recapitalization of the affected banks. The European Financial Stability Funds (EFSF) would increase its size to a proposed €2-€3-trillion from its current €440-billion. This would enable the fund to inject capital into banks and also support Spain and Italy’s financing needs to reduce further contagion risks.