The European Commission has rejected Italy’s draft budget. Valdis Dombrovskis, the commission’s vice-president responsible for the euro, said this week that Rome’s arguments for increasing its fiscal deficit were “not convincing,” the Financial Times reported. The Italians had been warned. But the Five Star/League coalition government nevertheless decided to pursue a fiscal expansion instead of the adjustment prescribed by European rules.

Two former executives of collapsed oil firm Afren were convicted on Wednesday of fraud and money laundering offences relating to a $300 million business deal, the UK’s Serious Fraud Office (SFO) said, Reuters reported. Former Afren Chief Executive Osman Shahenshah and former Chief Operating Officer Shahid Ullah received more than $17 million and laundered $45 million, some of which was used to buy luxury properties in Mustique and the British Virgin Islands, it said here.

After multiple turnaround plans and promises to restore growth, Deutsche Bank AG investors are no longer buying the talk, Bloomberg News reported. The German lender -- already the worst-performing major bank stock in Europe this year -- closed at a record low on Wednesday after Chief Executive Officer Christian Sewing conceded that cuts to the investment bank are having a deeper impact than expected. The continued bleeding, despite a decade-long bull market, is fueling speculation the bank may need to be merged before the next crisis hits.

UK Gourmet Burger Kitchen (GBK) filed for a form of bankruptcy protection on Wednesday after running up millions of pounds of losses, the latest British retail name to fall victim of weak consumer spending and high costs, Reuters reported. The chain’s parent, South Africa’s Famous Brands, said the board of GBK had initiated a company voluntary arrangement (CVA) for the business that would allow it to avoid insolvency or administration and ensure its continued existence.

Brussels has rejected Italy’s draft budget in an unprecedented move that threatens to deepen rifts between the European Commission and the populist government in Rome, the Financial Times reported. Valdis Dombrovskis, the commission’s vice-president responsible for the euro, said Brussels had “no alternative” but to demand changes, after Rome defied warnings that its plans for a wider deficit would smash EU fiscal rules and flout the country’s previous commitments. The move is the first time Brussels has refused to endorse an EU member state’s draft budget.

Active fund managers in Europe’s junk bond market believe the end of easy money may give them new grounds to fight back against ETFs, Bloomberg News reported. Some bond pickers claim investors will find it increasingly difficult to exit funds tracking benchmark indexes as liquidity is drained by central banks tightening monetary policy. Illiquidity is especially a concern in high-yield credit, where investors holding cash bonds can face steep penalties if they rush for the exit.

The price of Italian government debt has risen after the country’s government rebuffed a rebuke from Brussels over its spending plans but pledged not to expand the country’s deficit further after next year, the Financial Times reported. The yield on 10-year Italian government bonds dipped by 5 basis points to 3.41 per cent, extending a fall of 12 bps prior to the release of the statement. It was briefly down almost 30 bps just after the opening of trade. Its spread over the equivalent German Bund - a widely watched indicator of eurozone political tension - fell by 7 bps, to 293 bps.

The chief executive of Gatwick, the UK’s second busiest airport, has said he expects some airlines to fall into bankruptcy this winter following a number of recent failures, the Financial Times reported. “You will have a small number of airline failures,” Stewart Wingate told the Financial Times, adding that he did not anticipate any major airlines would collapse Gatwick experienced the failure of a major airline in 2017 when the UK’s Monarch went into administration. Last week, a small Cyprus-based carrier Cobalt Air failed.

A British peer-to-peer property lender has taken the unusual step of appealing to its regulator for help after one of its biggest borrowers threatened to sue the company and many of its investors, the Financial Times reported. Retail investors in Lendy are already facing tens of millions of pounds in potential losses after almost two-thirds of borrowers failed to repay their loans on time, according to a Financial Times analysis of its loanbook.

Italy’s Banca Monte dei Paschi di Siena has been sounding out investors to find potential buyers for new debt, bracing itself for the possibility it may need to take the expensive step if ordered to by regulators, the Financial Times reported. Managers at the lender met with investors in London earlier this month, in meetings arranged by JPMorgan, to update them on its progress just over a year after the Italian government rescued the world’s oldest bank.