The huge and rising government bond holdings of Japanese banks leave them vulnerable to a spike in interest rates, the International Monetary Fund has warned, the Financial Times reported. Sounding an alarm over the stability of Japan’s banking system, IMF officials said domestic bank holdings of government bonds in the country could rise to a third of their total assets within five years, from a quarter now.

India’s Kingfisher Airlines Ltd. (KAIR) escaped collapse in 2010 by restructuring 77.2 billion rupees ($1.4 billion) of debt it had run up buying airlines and adding routes amid the nation’s economic boom, Bloomberg Businessweek reported. Less than two years later, the carrier controlled by billionaire Vijay Mallya was back in talks with creditors, while its net debt had increased by 9 billion rupees. The airline this month grounded its entire fleet after pilots and engineers went on strike to demand seven months of unpaid salaries.

The global economy risks skidding toward recession just three years after pulling out of the previous one, the International Monetary Fund warned, adding that fighting a renewed world-wide downturn will be much more complex than it was in 2009, The Wall Street Journal reported. "Risks for a serious global slowdown are alarmingly high," said the IMF's World Economic Outlook report, which was released here Tuesday ahead of the fund's annual fall meeting. It was its bleakest assessment of global growth prospects since the 2009 recession.

Korea's financial regulator said Thursday it will step up moves to revamp the procedures for the corporate restructuring system in a bid to prevent moral hazard often incurred by company owners, The Korea Times reported. Under the envisioned plan, the regulator will strengthen creditors' rights by giving them more power to engage in the process of court receivership and debt workouts, according to the Financial Services Commission (FSC).

Alarming data at a number of savings banks suggest that the country has yet to entirely deal with its secondary banking crisis. But after suspending the businesses of 20 savings banks in the past two years over concerns of financial implosion, regulators appear to be backtracking from their commitment to purge the sector as Koreans prepare to elect a new president in December, The Korea Times reported.

Kazakh bank BTA has agreed a preliminary term sheet with creditors to restructure $11.2 billion of debt, the bank said on Wednesday, triggering a rally in its heavily-discounted bonds. Kazakh sovereign wealth fund Samruk-Kazyna, the bank's majority shareholder, agreed to convert its deposits into equity and issue a $1.592 billion interest-bearing subordinated loan, Reuters reported. Creditors will exchange their interests for a package of new notes and cash, BTA said in a statement.

Indonesia's PT Berlian Laju Tanker , the world's third-largest chemical shipper, hopes to restructure its $1.9 billion debt by the year-end and will switch its focus to niche liquid chemical and gas transport, its founder and chairman said in a rare media interview, The Chicago Tribune reported on a Reuters story. The country's leading oil and gas shipper defaulted on several debt instruments earlier this year and has been talking to creditors about restructuring its operations and finances.

Shareholders have been quietly shoved aside in the court-ordered restructuring of Sino-Forest Corp. — and they feel a lack of legal counsel is partly to blame, the Financial Post reported. Last week, veteran Bay Street lawyer Joe Groia agreed to take up the case of disgruntled Sino shareholders, who are furious about their treatment during the CCAA process. But he may be too late.

The difficulties of factory managers in Dongguan—a bellwether export town in the southern province of Guangdong—offer a glimpse of the broader challenges facing the world's No. 2 economy as global demand cools for Chinese-made goods, The Wall Street Journal reported. China's exports were up 7.1% in the first eight months of this year from a year earlier, slowing sharply from the 20.3% growth logged for all of last year. Guangdong's exports rose 5.9%, down from 17.3% last year.

General Motors Co on Friday dismissed claims made in a $3 billion lawsuit filed by Saab's parent that the U.S. automaker deliberately bankrupted the Swedish company by blocking a deal with a Chinese investor, Reuters reported. GM, in a response filed in the U.S. District Court for the Eastern District of Michigan, said the automaker had the legal right to approve Saab's transaction with China's Zhejiang Youngman Lotus Automobile Co. "The nub of plaintiffs' complaint is that GM declined to approve the transaction plaintiffs proposed to enter into with Youngman," GM said in the filings.