Payday loans companies are failing to adequately check whether loans will be affordable for borrowers and have been warned by the regulator over "aggressive" debt collection practices, The Guardian reported. The Office of Fair Trading has written to all 240 payday lenders highlighting "emerging concerns" over poor practices in the market, and has opened formal investigations into several payday lenders over how they pursue borrowers who have defaulted on their repayments.

Call it Greece vs. the bondholders, Round 2. Almost nine months after forcing private sector investors to stomach a 75 percent loss on their Greek bonds, the Greek government — with the support of Germany, its largest creditor — is weighing a plan to repurchase some debt at today’s market price of 25 to 27 cents, according to bankers and lawyers involved in the talks, The New York Times DealBook blog reported. The bid would be considerably below the 35 cent level that many large hedge fund that own the bonds have set as a minimum for getting a deal done.

Britain's banks should be forced to fully separate their retail arms from investment banking operations if they try to circumvent new rules designed to protect the taxpayer, a top regulator warned, Reuters reported. Andrew Bailey, head of banking supervision at the Financial Services Authority (FSA), said banks should face the threat of being broken up if they fail properly to comply with proposals to ring-fence retail deposits from riskier activities. Bailey said there was a risk that banks would try to "tunnel under" any ring-fence that was set for them.

Spanish banks, awaiting the first payments from a €100 billion European credit line, saw bad loans hit a new high in September, new data showed Monday, the Irish Times reported. The new figures will not affect the euro zone aid, aimed at cleaning up the toxic real estate assets from the lenders' balance sheets, but reflect moves by the banks to be more realistic about the extent of their bad loans. A recent independent audit of Spanish banks concluded that they needed capital injections totalling €60 billion to ride out a severe economic crisis.

Germany is standing firm in its opposition to another major write-down of Greece's debt ahead of a meeting Tuesday that aims to clear the way for the next disbursement of aid to Athens. "A haircut remains unimaginable," Finance Ministry spokeswoman Marianne Kothe said at a regular government news conference Monday, as euro-zone finance ministers work to thrash out a deal.

France suffered the second downgrade of its sovereign debt rating this year when Moody’s, the US rating agency, removed its triple A ranking on Monday night, the Financial Times reported. It followed a similar move in January by Standard & Poor’s and underscored concerns that the country’s high level of public debt, which has risen above 90 per cent of gross national product, put it in danger of becoming another victim of the eurozone debt crisis. The move will pose a serious test for François Hollande’s socialist administration, in office for only six months.

Debt-laden Portugal has passed the sixth quarterly review of its performance under an EU/IMF bailout, opening the way for payment of the next 2.5 billion euro (2 billion pounds) tranche of the loan despite growing economic risks, the lenders said on Monday. The review, which lasted just a week, found the country was progressing in reforming its economy and the programme remained broadly on track to allow it to again finance itself in debt markets as planned next year. Previous reviews lasted two weeks.

British aero engineer Hampson Industries Plc, which has been struggling with a heavy debt load, on Monday said it planned to appoint administrators, less than four months after it terminated a sale process, Reuters reported. The company, which supplies tools and components to planemakers Airbus and Boeing Co, put itself on the block in February but warned that the sale process was likely to result in little or no value to the company's shareholders.

The European Commission is pushing for a significant bolstering of Europe’s defences against aggressive corporate tax avoidance schemes, as the EU bids to clamp down on practices which cost its member states as much as $60bn per year. Pressure is mounting on companies which artificially shift profits to tax havens or low-tax jurisdictions, following months of revelations about the very low tax rates enjoyed by some groups at a time when cash-strapped governments across Europe are struggling to boost revenues.

Mariano Rajoy has always said that when it comes to a possible Spanish bailout, he will do what is right for Spain and right for Europe. So far, it has to be said, the Prime Minister's policy of sitting on his hands has been vindicated, much to the frustration of those who predicted the markets would have forced his hand by now, The Wall Street Journal Agenda blog reported.