Codere SA, the Spanish gambling company that last week reported its worst earnings in more than two years, sunk to a record after Moody’s downgraded its credit rating on concern it may default on loans by the end of June, Bloomberg reported. Codere, which depends on Argentina for more than one-third of its revenue, reported a 21 percent drop in first-quarter earnings after an anti-smoking law went into effect in that country. Earnings before interest, taxes, depreciation and amortization amounted to 62.1 million euros ($79.9 million), the lowest in 10 quarters.

Portugal’s top bankers have called on Europe’s leaders to stop “playing with fire” and moderate their stance towards the eurozone periphery, or risk instilling alarm among bank depositors in future. In separate interviews, the heads of the country’s two biggest banks – Millennium BCP and Banco Espírito Santo – said they were concerned that the precedent set by Europe’s treatment of Cyprus’s recent troubles had increased nervousness across the eurozone to dangerous levels. “Leaders need to moderate their language.

Many duped savers at Spanish lender Bankia are shunning a state-supervised compensation scheme in favor of expensive lawsuits, prolonging a mis-selling scandal and complicating efforts to restore faith in the banking system, Reuters reported. The disputes over mis-selling at Bankia and other nationalized banks have created a major headache for the government as it tries to take the next step in their rescue, imposing large losses on holders of junior debt.

Spanish judges this week sent the strongest signal yet that they intend to crack down on former executives at bailed-out banks by putting the ex-president of Caja Madrid into custody in the first detention of a top financier since the financial crisis began, the Irish Times reported. Amid intensifying anger at a banking crisis that last year forced Spain to accept a European rescue for its lenders, Miguel Blesa, the 65-year-old former head of the bank, the precursor to the rescued Bankia, will remain in jail ahead of trial until he posts bail of €2.5 million.

Italy's new government took its first concrete steps Friday, announcing some €3 billion ($3.86 billion) in economic measures aimed at offering relief to households and workers amid the country's longest postwar recession, The Wall Street Journal reported. Prime Minister Enrico Letta, who was sworn in last month as head of a coalition cabinet, said an unpopular tax on primary residences would be suspended and an extra €1 billion would be pumped into a wage-supplement program. The measures were the bare minimum of what the new government has pledged.

Central to the Government’s plan to deal with the legacy of personal debt is the creation of a new brand of insolvency professional, due to be registered from next summer. Depending on who you talk to, the Personal Insolvency Practitioner (PIP) will be jumping on the greatest legal gravy train for years, or embarking on a journey that will be far more hassle than it’s worth, the Irish Times reported. What’s certain, according to Lorcan O’Connor, director of the Insolvency Service of Ireland (ISI), is that “if we don’t get the practitioner bit right the system won’t work”.

Lawyers for Ulster Bank have applied to a US court seeking to intervene in the bankruptcy proceedings of property developer Sean Dunne so the bank can proceed with its own bankruptcy proceedings against him in Ireland, the Irish Times reported. Ulster Bank said that Mr Dunne’s filing for bankruptcy in the US was the “culmination of extraordinary efforts” by him to “avoid the application of Irish law to an Irish national with respect to Irish debts and Irish assets”.

Ireland’s EU-IMF bailout has been broadly successful, according to a new reports by a leading European thinktank, but risks remain that a second bailout will be required down the line, the Irish Times reported. In an analysis of the manner in which three euro area countries have been bailed out, the report concludes that Ireland’s bailout has been a success, Portugal’s a “potential” success and Greece’s a failure.

A deepening recession and banking stress tests could find Italy's mid-sized lenders short of billions of euros, putting the state on the hook for a new wave of cash calls and triggering an overhaul of how they do business, Reuters reported in an insight. Even ahead of the European stress tests, expected to take place when or shortly before the European Central Bank (ECB) takes over direct supervision of euro zone banks next year, Italy's smaller banks are under pressure to boost their balance sheets after a Bank of Italy audit of problematic loans and to meet stricter Basel 3 capital rules.

Thomas Cook Group, the debt-laden travel operator, launched a £1.6bn capital restructuring on Thursday as part of its bid to return to normal trading after flirting with collapse in late 2011, the Financial Times reported. The lossmaking travel group, which is midway through a restructuring programme, said it would raise £425m through a rights issue and share placement. It also plans to sell £441m of bonds, and has renegotiated a £691m debt facility.