Hong Kong risks a property bubble if home prices keep rising, said Peter Wong, HSBC Holdings Plc’s chief executive officer for the Asia-Pacific region, Bloomberg reported. The Hong Kong government is trying to curb 42 percent surge in home prices since the beginning of 2009 amid concern housing is out of reach of ordinary residents. Prices may rise 10 percent in the second half of this year if interest rates remain at two-decade lows and the local economy keeps growing, according to property consultant Jones Lang LaSalle Inc.

Investors are understandably scared of the sovereign debt crisis unfolding in Europe. Amid their angst, however, they are ignoring a more likely, and significantly larger, debt catastrophe that is about to hit the nation with the second-largest economy in the world — Japan. Two decades of stimulative, low-interest-rate fiscal policy have made Japan the most indebted nation in the developed world, and as new Prime Minister Naoto Kan recently said, in his first address to Parliament, that situation is not sustainable, Seeking Alpha reported.

The debt-ridden Korea Land and Housing Corp. (LH), the state-run housing company, says its financial troubles will force it to kill or water down most of its 140 new housing and redevelopment projects around the country, The Korea Times reported. And the government, caught between letting the air out of the bubble and creating another one, is quick to turn its back on its ailing mule, although its ineptitude in real-estate policies is blamed for creating much of LH’s troubles in the first place.

A Kazakhstan bank's bid to use the U.S. bankruptcy court to halt an overseas legal proceeding could drag the court into disputes in which the U.S. itself has little at stake, Dow Jones Daily Bankruptcy Review reported. Kazakhstan's JSC BTA Bank says the U.S. bankruptcy court's decision to grant it Chapter 15 protection in the U.S. after it underwent restructuring in its home country last year extended a key benefit of U.S. bankruptcy law: the automatic stay that halts legal action against a debtor company.

Debt-ridden Japan Airlines Corp and the state-backed turnaround body overseeing its rehabilitation said the firm's capital plans, including negotiations for new financing, will be not be finalized until September or later, the Nikkei business daily reported. JAL and the Enterprise Turnaround Initiative Corp of Japan (ETIC) said they will be able to submit a rehabilitation plan to the Tokyo District Court by the end of August, as scheduled, the paper reported.

Debt-ridden Japan Airlines Corp and the state-backed turnaround body overseeing its restructuring have sought lender approval to waive off more than 521.6 billion yen ($6 billion) that JAL owes, the Nikkei business daily reported. Of the 521.6 billion yen for which approval is being sought, the company has 383 billion yen in loans and the rest in corporate bond and derivatives, the paper said. As part of the restructuring plan, the Enterprise Turnaround Initiative Corp of Japan has asked the Development Bank of Japan to write off 142.1 billion yen of JAL debt on its books, Nikkei reported.

At last some answers to a major question mark hanging over the Chinese banking sector: Just how much of its lending has gone to local government investment vehicles—and how iffy has that lending been? Because of restrictions on how much local governments can borrow from banks directly, off-balance-sheet funding has become a key means for them to obtain financing. These funds, in turn, have fueled the investment boom that lies behind China's solid economic growth since the global financial crisis, The Wall Street Journal Heard on the Street blog reported.

India plans to start conducting twice-yearly stress tests on its banks, following in the footsteps of financial regulators in the US and Europe, the Financial Times reported. The Reserve Bank of India said on Tuesday that it had conducted rudimentary stress tests during the global financial crisis to check credit and interest rate risk. The bank said it would undertake more sophisticated tests in the future to build confidence in the country’s banking system.

Christchurch developer David Henderson has been granted a stay to fight a court order to liquidate his flagship company, Property Ventures, BusinessDay.co.nz reported. The company, of which Henderson is a director, owes Inland Revenue at least $88,734 in tax, which it failed to pay between September 2008 and February 2010.

According to Chinese officials Monday, Chinese banks have encountered high default risks on part of loans they have lent to local governments across the country, the Global Times reported. China's commercial banks have identified it to be at least one-fifth of the 7,700-billion-yuan loan ($1,135 billion). Though these questionable loans not always go bad, the country's non-performing loan (NPL) ratio is almost certain to increase slightly by the end of the year, said an official from the China Banking Regulatory Commission (CBRC).