The European Central Bank will remove a capital surcharge on some lenders after they addressed shortcomings in their leveraged finance businesses, Bloomberg News reported. “Some banks have fixed the problems and will see the capital add-on go away,” Andrea Enria, who chairs the ECB’s Supervisory Board, said in an interview in Frankfurt. “Others have not and will keep it for a bit longer.” Enria didn’t name any of the banks involved.

Bank of England policy maker Catherine Mann signaled she’s likely to support further interest-rate increases to combat inflation, warning that investors are pricing in an ever larger premium into UK assets to account for future price shocks, Bloomberg News reported.

The leader of Shropshire Council said the authority considered issuing a notice to declare bankruptcy, but decided against it, BBC.com reported. Inflation and increased demand for services meant the council's reserves were "practically gone". They raised the issue in a cabinet meeting in the same week that Birmingham City Council declared itself effectively bankrupt. Leader Lezley Picton said a plan was in place to control finances. Last year, Ms Picton said adult social care made up 85% of the council's entire budget. Leaving just 15% for everything else.

Russian policymakers believe the nation’s economy has adapted to the costs of the war on Ukraine and international sanctions and will continue to grow over the next few years, Bloomberg News reported. The Economy Ministry sees Russian gross domestic product slowing to 2.3% over the next two years from 2.8% in 2023, according to its macroeconomic forecast through 2026, which was discussed at a government meeting led by Prime Minister Mikhail Mishustin Friday and seen by Bloomberg News. GDP growth is expected to further decline to 2.2% in 2026.

Direct lending, a key but expensive source of credit for riskier European firms that banks often shy away from, is running out of steam, a fresh sign that aggressive interest rate rises may be starting to cause funding stress and exacerbate economic pain, Reuters reported. Fundraising and deal-making have dropped sharply at European private debt funds, new data shows.

Germany’s embattled economy, once Europe’s main engine of growth, looks set for a fresh contraction as its all-important manufacturing sector continues to weaken, the Wall Street Journal reported. After stagnating since the end of last year, Germany’s output is likely to contract this quarter as its factories face higher energy costs, a less welcoming global marketplace and intense competition from China in key sectors, recent data shows. The country was hit hard by Russia’s invasion of Ukraine, which caused a surge in energy and food prices.

The governor of Poland's central bank said Thursday that its large interest rate cut was justified despite high inflation because prices are stabilizing and the era of high inflation is ending, the Associated Press reported. Adam Glapinski spoke a day after the bank's monetary council announced that it was cutting interest rates by 75 basis points, a much larger reduction than had been expected.

Local government bodies have warned that more councils across the UK could declare themselves in financial dire straits, after the country’s second biggest city said it could not balance its books, Agence France-Presse reported. In a statement on Tuesday, Birmingham City Council in central England said it had issued a Section 114 Notice under the Local Government Finance Act 1988, effectively declaring itself bankrupt. The statutory trigger blocks spending on all but essential services, and forces councillors to come up with an action plan within 21 days to tackle the shortfall.

The new owners of steel maker Celsa, Spain's largest private industrial group, said on Wednesday they will appoint former Gas Natural Fenosa CEO Rafael Villaseca as chairman of its board of directors, Reuters reported. On Monday, a local court in Barcelona approved a multibillion-euro restructuring plan presented by Celsa's creditors, handing over control of the firm to a group that includes Deutsche Bank, Attestor, Anchorage, GoldenTree and SVP.

Birmingham City Council has declared itself effectively bankrupt, the BBC reported. The largest local authority in Europe, it has issued a Section 114 notice preventing all but essential spending to protect core services. The pressures have been linked to a £760m bill to settle equal pay claims. In a joint statement, the leader and deputy leader of the Labour authority said the move was a "necessary step as we seek to get our city back on a sound financial footing".