Banks, Euro | featured news

The euro zone economy shows little sign of recovering before the year-end despite an easing of financial market conditions, European Central Bank Mario Draghi said on Thursday after interest rates were left at a record low.

Britain is pushing for changes to a proposed euro zone banking union to dilute the power of the European Central Bank, EU officials said, potentially hampering efforts to build the infrastructure urgently needed to underpin the euro.

The Spanish economy is falling deeper into recession and depositors are pulling their money out of the banks, figures published on Tuesday showed, while the country's most economically important region, Catalonia, said it needed a major rescue from Madrid.

Spain’s borrowing costs soared Tuesday to levels that have sent other euro members into the arms of international lenders, calling into question the viability of a bailout deal for Spain’s banking sector even as other troubled countries were weighing whether they could make similar rescue arrangements.

Spaniards alarmed by the dire state of their banks are squirreling money abroad at the fastest rate since records began, figures showed on Thursday, and the credit ratings of eight regions were cut.

Greece's president spoke of "fear that could develop into panic" at the country's banks in the weeks before fresh elections that could precipitate Athens exit from the euro zone.

Major central banks around the globe took coordinated action Wednesday to ease the strains on the world's financial system, saying they would make it easier for banks to get dollars if they need them. Stock markets and the euro rose sharply on the move.

A top board member of the European Central Bank unexpectedly resigned on Friday in what analysts saw as further evidence of the deep divisions over how to resolve Europe’s growing debt crisis. The move immediately rattled European markets and the euro, which slipped to a six-month low against the dollar. The European Stoxx and German DAX indexes tumbled 3.5 percent.

Stress tests on Ireland's four main lenders will reveal a capital hole of around 20 billion euros ($28.2 billion), The Sunday Business Post reported, without citing any sources.