Market gauges measuring euro break-up risk emanating from Italy are starting to flicker, flagging the risk that another existential crisis may be building for the euro zone. Hit hard by the coronavirus pandemic, Italy faces recession and massive debt increases, Reuters reported. It’s also been left disillusioned with the response from wealthier northern European states to calls for help. On Thursday, EU leaders agreed a trillion-euro emergency fund to finance recovery from the pandemic but provided few details.

Problem loans at some of Standard Chartered Plc’s large clients may top $600 million as a string of corporate scandals coincides with woes at firms hit by the coronavirus pandemic, Bloomberg News reported. NMC Health Plc, the hospital operator that’s uncovered evidence of fraud, and Hin Leong Trading (Pte.), the Singaporean trading house being investigated by police, represent nearly $500 million of lending for Standard Chartered, according to public filings. Separately, a South African farm bank that the London-based company lends to has defaulted on some of its debt.

Norway’s parliament voted through a new company restructuring law on Friday that could help save Norwegian Air and many other companies from potential bankruptcy as a result of the restrictions to stem the spread of COVID-19, Reuters reported. The legislation replaces current regulation on debt negotiations and relaxes rules for converting debt into equity. “(The new law) is a more efficient tool to ... sort out what parts of a business can be strong enough to survive,” Justice Minster Monica Maeland told parliament.

Virgin Atlantic is still talking with the British government about a bailout package to cope with the devastating effects of the coronavirus outbreak on travel as well as focusing on private sector funding, a company spokeswoman told Reuters. The comments came after the Sunday Telegraph reported here that founder Richard Branson was seeking a buyer for the airline and had set a May-end deadline for a sale, and that talks with the government for a 500 million pound ($618.35 million) bailout package had been "effectively shelved,” Reuters reported.

The Swiss economy is expected to suffer its biggest contraction since the mid-1970s this year and recover only slowly in 2021, the government revealed in a bleak new outlook, Bloomberg News reported. The State Secretariat for Economic Affairs in Bern slashed its forecast on Thursday, saying the economy was expected to shrink 6.7% in 2020, faring worse than it did during the financial crisis. That’s because in addition to the downturn globally, private consumption in Switzerland would face headwinds from rising unemployment and people’s uncertainty about the future.

Credit Suisse Group AG was stung by the collapse of Luckin Coffee Inc. in China following an accounting scandal, which led to a five-fold increase in Asian loan-loss provisions, Bloomberg News reported. The Swiss bank set aside 97 million Swiss francs ($100 million) for soured loans, primarily related to three cases, the largest of which was Luckin Coffee, according to a person familiar with the matter. The bank only referred to a “Chinese food and beverage company” in its earnings statement Thursday.

Banco BPM SpA may deepen cost cuts and branch closures and slow planned investments as the coronavirus pandemic weighs on profitability, Chief Executive Officer Giuseppe Castagna said, Bloomberg News reported. Italy’s third-largest bank unveiled its four-year strategic plan just days before the country entered a nationwide lockdown, with a 0.1% contraction as its worst-case scenario for the economy. Bloomberg Economics now expects output to shrink by more than 13% over the full year.

UniCredit boosted its provisions for potential loan losses by €900m in preparation for a sharp economic contraction, an early indication of the severe impact the coronavirus pandemic will have on the fragile European banking system, the Financial Times reported. Italy’s largest bank by assets made the decision after estimating that the eurozone gross domestic product will shrink 13 per cent this year, before a 10 per cent rebound in 2021, according to a statement on Wednesday. It stressed that the “unprecedented situation” made financial forecasting “difficult”.

The United Nations is calling for the creation of a global authority to help implement the temporary suspension of debt obligations from developing countries during the coronavirus pandemic, Bloomberg News reported. The proposal will enable private creditors to join the debt payments pause and allow countries use resources to fight the new illness, said Stephanie Blankenburg, head of debt and development finance at UNCTAD, the UN’s trade and development agency.

European bank stocks are trading close their steepest-ever discount to U.S. rivals and early signals show that first-quarter earnings may only reinforce the gap, Bloomberg News reported. The continent’s lenders, already in a tough spot before the coronavirus outbreak hit, are likely to detail more worrying news for their embattled investors. In Germany, Deutsche Bank AG may have seen credit trading weigh on its markets revenue while Commerzbank AG probably started to set aside more funds for troubled loans.