Separating the signal from the noise is not always easy, especially in Italy. However, this time the signal is loud and clear: Italy is going for fiscal loosening. It’s the wrong approach for several reasons, the Financial Times reported in a commentary. If the aim is to tackle the country’s high debt through faster economic growth, the old-style stimulus that is being proposed will not work. It generates only a temporary boost to demand, leaving the country with an even higher debt burden and elevated borrowing costs.

A summary judgment application for €1.7 million against former AIB and Central Bank director Bernard Somers in relation to a loan that was secured on various assets, including his home in Foxrock, Dublin, has been struck out at the Commercial Court after the sides reached an agreement, The Irish Times reported. Launceston Property Finance DAC had brought the case arising from a demand issued on October 4th, 2017 for some €1.76 million allegedly outstanding on a €3.62 million loan but the matter was adjourned for talks.

Aryzta, the troubled Irish-Swiss baked goods group, has been urged to halve the scale of a planned €800 million rights issue designed to pay down debt and fund the group through a major restructuring of its operations, The Irish Times reported. Cobas Asset Management, the Spanish group that is Aryzta’s largest single shareholder, said on Monday that it is requesting an extraordinary general meeting of shareholders to reduce the money being raised to €400 million. Cobas owns almost 15 per cent of Aryzta’s voting stock.

Italy’s bond markets may be underpricing the risk of the nation having to restructure its debt, Bloomberg News reported. Credit default swaps, which protect investors against the nation failing to pay off its debts, suggest that Italian debt securities are still too expensive, according to NatWest Markets. To counter that, investors should place a curve flattening trade, betting on short-dated bonds selling off more than those further out, it said.

Euro zone banks have a large shortfall in their loss-absorbing buffers and now face tougher market conditions for building them up due to higher volatility and widening spreads in sovereign yields, the bloc’s banking watchdogs said on Monday. Under international and EU banking rules, large banks must issue special loss-absorbing debt known as TLAC and MREL that can be converted into capital if a crisis burns through their core capital buffer, Reuters reported.

Italy’s government late Monday approved a draft budget law for next year, confirming a set of expansionary measures that could lead to a fast-rising deficit and a conflict with the European Union, The Wall Street Journal reported. The government, a coalition of the antiestablishment 5 Star Movement and the far-right League, has rattled financial markets in the past month with its budget plans, with investors demanding significantly higher interest rates to buy the country’s bonds. The full draft budget law will be sent to the Italian parliament by Saturday.

Italy could hold around 15 percent of a relaunched Alitalia, with the new company having up to two billion euros ($2.3 billion) of capital, Deputy Prime Minister Luigi Di Maio said on Friday, Reuters reported. “If France has 14.3 percent of Air France ...

The Irish Banking Culture Board being set up by lenders in the wake of the tracker mortgage scandal is a “self-regulatory” body that will not work unless the Central Bank, unions and consumer groups also have stakes, the Financial Services Union (FSU) has said, the Irish Times reported. “If the banks were serious about culture change, rather than setting up a self-regulatory body, they would support the FSU’s call for a stakeholder-led culture board on banking with the equal participation of management, the Central Bank, FSU and consumer groups,” said Gareth Murphy, the union’

A major eurozone country has elected new leadership on promises to loosen the purse strings in defiance of bond markets, Berlin and bureaucrats in Brussels. The message to Chancellor Angela Merkel, Europe’s most powerful leader, is uncompromising: “People have made a choice which envisages a renegotiation of the fiscal treaty. It’s not Germany that decides for the whole of Europe.” These are not the words of Italy’s populist leaders preparing to send a rule-breaking budget to Brussels, the Financial Times reported.

Gourmet Burger Kitchen (GBK) is reportedly drawing nearer to a controversial company voluntary arrangement (CVA) used to shut stores and renegotiate rents, in a battle that would likely pitch the beleaguered restaurant chain against its landlords, City A.M.