News round up: Lloyds Banking Group plc, Royal bank of Scotland Group plc, Barclays plc, HSBC Holdings plc, Greece, International Airlines Group, Wood Mackenzie and Competitive cities.

The Treasury and the City watchdog have launched a probe into fears that hundreds of small businesses have been lured into complex, toxic loans by the UK’s biggest High Street banks, including Lloyds Banking Group plc (LON:LLOY), Royal Bank of Scotland Group plc (LON:RBS), Barclays plc (LON:BARC) and HSBC Holdings plc (LON:HSBA).

The concerns focus on loans underpinned by highly complicated financial instruments, called ‘interest rate swaps’, which were meant to protect firms against rising interest rates. When rates slumped to historic lows in 2009, this gamble backfired and business owners were often left with bills worth hundreds of thousands of pounds. The amount they owed on the loan was ratcheted up and those wanting to back out of the deal were often hit with huge ‘breakage fees’.

A spokesman of the Treasury said: "We will review this issue closely, alongside the Financial Services Authority and the Financial Ombudsman Service, to ensure that businesses have been sold these products in a clear and understandable way." The Ombudsman confirmed it has been receiving a ‘handful’ of complaints every month but is restricted to investigating complaints from the smallest companies, writes the Daily Mail

Greece

Andrew Tyrie, chairman of the Treasury Select Committee, tonight called for Greece to exit the euro and for the resources of the International Monetary Fund (IMF) to be significantly boosted to tackle future financial crises. In a well received speech at the annual British Venture Capital and Private Equity Association's annual chairman's dinner, Mr Tyrie said the current lull in the single currency's crisis, after last week's Greek bond swap, should be used to engineer a permanent exit for Greece.

The economic and political challenges facing the country if it stays in the Eurozone would be too great to be sustainable, he argued. Mr Tyrie also said increasing the size and fire power of the IMF was essential. But he also warned the body should avoid getting too close to the Eurozone in future but should instead "get tough" with the single currency bloc, The Telegraph writes.

International Airlines Group

International Airlines Group faces a lengthy competition investigation into its contentious takeover of BMI British Midland after being told by the European Commission that its proposed deal concessions are likely to be rejected.

IAG’s offer to relinquish some Heathrow slots extends the deadline for an initial Commission decision from March 16 to March 30. Brussels officials will seek feedback from rival airlines, including Sir Richard Branson’s Virgin Atlantic, which is strongly opposed to the deal, The Financial Times reports.

HSBC

HSBC is set to scale back its Asian operations as it considers the sale or closure of seven Asian retail businesses from Pakistan to New Zealand, where it has decided to no longer focus investment, The Financial Times says.

Wood Mackenzie

Wood Mackenzie, one of the Scotland’s oldest and most lauded companies, could be put on the block in a £1bn deal netting its private equity owners a record-breaking profit in just three years. Charterhouse, a notoriously secretive and wealthy private equity group, has asked boutique investment firm Quayle Munro to help it with a “low key” strategic review following approaches from US trade buyers.

Wood Mackenzie, which has seen City grandees Sir George Mathewson and Gerry Grimstone act as chairmen in recent years, was founded in the 1840s as an Edinburgh- based stockbroker. However, the company’s rise to prominence began after it started writing intricate reports on the North Sea in the 1970s, which became its calling card and eventually the basis of its dominance as a specialist in research and analysis for the oil, gas and mining industry, according to The Telegraph.

Competitive cities

The Big Apple’s ability to bounce back from economic hardship has helped it to fight off London to claim top slot as the world’s most competitive city. New York, London and Singapore topped the charts in a detailed study compiled by the Economist Intelligence Unit that measured cities on eight criteria ranging from financial maturity to culture, environment and government institutions.

Michael Bloomberg, the Mayor of New York, wasted no time in welcoming the findings. “New York’s position at the very top of this list is no accident,” he said. “It’s due to the investments our administration has made and the world-famous ingenuity and creativity of New Yorkers,” The Times reports.