The Bank of England has acted. Next up, the U.K. treasury, The Wall Street Journal reported. Economists say that new treasury chief Philip Hammond may need to relax a longtime spending squeeze or cut taxes to counter signs of a slowdown since voters’ surprise decision to exit the European Union. The BOE cut its benchmark interest rate to a historical low on Thursday and restarted bond purchases in an unexpectedly broad package of measures, reflecting its deep concerns over the potential cost of Brexit. In announcing sharply lower growth forecasts, Gov.

The best that can be said for Italy’s latest plan to rescue its third-largest bank is that it might just work, The Wall Street Journal reported. Monte dei Paschi di Siena announced on Friday a complex deal that would see it offload €40 billion ($44.7 billion) of its most toxic bad debts—equivalent to around 15% of its loan book—into a newly created privately-funded vehicle, paving the way for the lender to raise around €5 billion in fresh capital.

The Bank of England’s interest-rate cut Thursday buoyed stock markets here, but for some big British corporations, the move—the central bank’s first rate cut in seven years—is likely to translate into widening pension shortfalls, The Wall Street Journal reported. Many of the U.K.’s defined-benefit plans, which promise to pay out fixed benefits to retirees, have fallen deep into deficit. The value of contributions in many of the plans hasn’t kept up with expected outlays to pensioners in years to come.

There is an “evens” chance of Britain falling into recession by the end of next year, according to a leading economic think-tank, which called on the Bank of England to wield a “sledgehammer” against the expected downturn, the Financial Times reported. The National Institute for Economic and Social Research revised down its forecast for growth by 0.3 percentage points in 2016 and 1.7 percentage points in 2017 — larger downgrades than those made by the International Monetary Fund last month.

Russian state development bank VEB has solved its problems with liquidity for this year, the bank's Chairman Sergei Gorkov told President Vladimir Putin, the Kremlin said on its web-site on Wednesday, Reuters reported. Finance Minister Anton Siluanov said earlier that VEB which has lent heavily to loss-making projects would receive 150 billion roubles ($2.3 billion) from the budget in 2017, the same as in 2016. Read more. (Subscription required.)

Was Larry Summers right after all? Around the world, governments are planning fresh spending to boost growth and support wages, heeding the advice of the Harvard University economist and others who have argued that economies need the jolt as society ages and productivity sags, Bloomberg News reported. That’s signaling the ascendancy of energizers like Japanese Prime Minister Shinzo Abe, and the firing of austerity advocates such as former U.K. Chancellor George Osborne. The shift away from budget rigor and reliance on monetary policy has been subtle and isn’t universal.

The National Asset Management Agency (Nama) has re-appointed receivers to 36 companies and borrowers to ease the sale of their loans, the reported. The State agency published a series of official notices showing that it has appointed receivers to the firms, whose loans it took over from the banks in the wake of the property crash. As it stands, the individual receivers appointed to the companies and assets involved can only act for Nama. This could create difficulties should the agency want to sell the loans to a third party, who would then be entitled to call in the debt.

The Bank of England's stress tests are "worse than useless", according to a report claiming British banks would buckle under the strain of a major economic shock, BT.com reported. A study by the Adam Smith Institute said the Bank's stress tests are like a "ridiculously easy exam with a ludicrously low pass rate", which disguises the ability of UK banks to cope with an economic blow on the scale of the 2008 financial crisis. The report, which pinpoints 13 flaws in the stress test, said every single UK lender would currently fail "more rigorous" stress tests by the US Federal Reserve.

A German state bad bank has accelerated the wind-up of Dublin-based lender Depfa Bank, after buying back €5.6 billion of its bonds from the market so far this year, the Irish Times reported. The move by bad bank FMS Wertmanagement to mop up Depfa Bank’s liabilities in the market comes as it also shrinks the lender’s assets at pace. A spokesman for FMS-WM in Munich said the wind-down is currently being carried out “faster than planned”. However, he declined to say when the bank would ultimately be wound down.

Irish bank stocks opened down on Monday morning, as investors responded to stress tests from the European Banking Authority which placed AIB and Bank of Ireland among the worst performers in Europe, the Irish Times reported. Across Europe however, bank shares largely shrugged off the results of Friday’s tests. Italy’s Monte dei Paschi was the biggest loser, but has bounced as much as 10 per cent Monday morning after it was the subject to a last-minute rescue deal that means it will avoid a part-nationalisation.