Iceland waits for IMF decision on loan

Iceland will have to wait for word on International Monetary Fund help to rebuild its economy after the IMF’s board meeting to consider Iceland’s application for a $2 billion (£1.26 billion) loan was postponed until Monday. The global financial crisis has led to the collapse of three of the country’s biggest banks, with government support for them alone to cost as much as 1.1 trillion Iceland crowns (£5.4 billion), equivalent to 85 per cent of the country’s GDP. The Icelandic central bank held interest rates at 18 per cent yesterday and gave warning that inflation could push 20 per cent next year. Meanwhile, Hungary, which secured a $25.1 billion IMF support package, unveiled a $2.95 billion aid package to support its banks. (Reuters)

Starbucks shake-up

Starbucks said that Pete Bocian, its chief financial officer, would leave the coffee chain at the end of the month to join Hewlett-Packard, the computer maker, as chief administrative officer. Mr Bocian joined Starbucks only in April 2007. The company has been closing US coffee bars as it grapples to revive its flagging domestic business amid the weak economy. Troy Alstead, Starbucks’ senior vice-president of global finance, is to succeed Mr Bocian. (Reuters)

Polish shipyard sale

Poland’s loss-making Gdynia and Szczecin shipyards are to be sold and the proceeds used to pay creditors and return more than €1 billion (£806 million) of illegal state aid, the European Commission announced. The decision ends four years of tense negotiations between Warsaw and Neelie Kroes, the EU Competition Commissioner. The fate of a third shipyard, Gdansk, the cradle of the Solidarity movement, will become clearer after further talks next week. (Rory Watson)

Debt mounts at ABC

ABC Learning Centres, the Australian childcare operator that owns the Busy Bees nursery and childcare payments businesses in the UK, has appointed voluntary administrators to help to clear a mountain of debt. The receivers have said that the childcare centre business would continue to operate as usual. John Woodward, chief executive officer, has said that he was looking at ways to buy it back from the Australian parent company. (AP)

Chalco cuts output

Chalco, China’s largest producer of aluminium, said that it had shut down 38 per cent of its total annual production of alumina, the main material for the production of the metal. It is Chalco’s second big capacity cut in the past two weeks because of sliding prices and weak demand. Separately, Citigroup and Citadel Investment are among foreign creditors devising a plan to seize and sell the assets of FerroChina, a Chinese steelmaker that owes about $1 billion (£634 million). (Bloomberg)

Bank embarrassment

KfW, Germany’s state-backed development bank, has set aside €98 million (£79 million) for possible losses related to Icelandic investments. KfW admitted last month that it had transferred more than €300 million to Lehman Brothers on the same day that the New York-based securities firm filed for bankruptcy, leading the Bild newspaper to dub KfW Germany’s “dumbest bank”. That debacle led to an investigation and the departure of two executives. (Jim McLean)

Falconer warns of financial blame-game

A surge in legal action could be driven by regulators such as the Financial Services Authority seeking blame for the financial crisis, Lord Falconer of Thoroton said last night at a Times Law Panel discussion. The former Lord Chancellor said: “This was not an act of God. Something caused the near extinction of the financial system and people want to know why.” He said that the response should not be too lawyer-driven.

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