Spain said its crisis-hit banks will need as much as €62 billion ($78.75 billion) in new capital to absorb losses from a real-estate meltdown, as the International Monetary Fund warned that the euro-zone plan to aid the country may not work, The Wall Street Journal reported. Spanish lenders have been pummeled by a dive in property prices that hasn't yet bottomed out, as loans to households are going bad amid record-high unemployment.

The European Central Bank is poised to relax its collateral rules for central-bank loans in a bid to ease strains on commercial banks in Spain and the rest of Southern Europe, according to people familiar with the matter. ECB officials have broadly agreed to make more types of securities, including certain mortgage-backed and asset-backed securities, eligible as collateral at its lending facilities. Details of the plan still need to be finalized, but a decision is expected on Friday, The Wall Street Journal reported.

Italy's prime minister, Mario Monti, has warned of the apocalyptic consequences of failure at next week's summit of EU leaders, outlining a potential death spiral whose consequences would become more political than economic. The Italian leader is to hold talks with Chancellor Angela Merkel of Germany, the French president, François Hollande, and Spain's prime minister, Mariano Rajoy, in the hope that the single currency's big four countries can pave the way for a breakthrough at next week's meeting.

Air France announced more than 5,000 job losses under a cost-cutting plan on Thursday, creating a political headache for new President Francois Hollande, Reuters reported. The cuts at the French flag carrier, part of the loss-making Air France-KLM Group, come as the world's airline industry grapples with limited growth prospects, rising costs and fallout from the euro zone debt crisis. But Hollande's Socialist government, in place since last month, has pledged to counter rising unemployment by making it prohibitively expensive for companies to lay off workers.

An Italian proposal to use Europe's money to reduce the borrowing costs of Italy, Spain and other countries under siege by investors has become the new hot topic on the euro zone's agenda, the International Herald Tribune reported. Prime Minister Mario Monti of Italy has started urging that the euro zone's bailout funds, along with money from the European Central Bank, be used to buy Spanish and Italian bonds, whose yields have been high lately. Those yields, or interest rates, slipped Wednesday, on hopes that Europe might intervene.

The Bank of England signalled on Wednesday that it was close to releasing a wave of new money into the shrinking British economy because of the worsening euro zone debt crisis. Such a move would effectively involve printing money to buy government bonds, in turn lowering British borrowing costs. Coming on the back of last week's announcement of new BoE and government measures to spur lending to businesses, it underlines the depth of concern that exists about the state of Britain's economy as its main trading partners weaken.

A High Court judge has continued orders restraining the children of bankrupt businessman Seán Quinn, a nephew, two sons- in-law and a number of international companies, from dealing with assets owned or controlled by them worldwide below €50 million each, the Irish Times reported. The Quinn defendants will be allowed €2,000 living expenses each until the injunction orders return to court next Wednesday, plus legal and perhaps some domestic expenses subject to formal approval by the court.

Britain's beleaguered homeowners will have to wait until 2014 at least before they see a rise in the value of their properties, as weak demand and tight lending conditions keep the market in check, a Reuters poll found on Tuesday. Home prices, which have dropped about a fifth since their peak five years ago, will fall another 1.6 percent this year and only hold steady in 2013, according to the poll of more than 20 market watchers taken in the past few days. Housing has long been a bedrock of consumer wealth in Britain and average prices tripled during a property boom in the 10 years to 2007.

Indebted Russian coking coal and steel producer Mechel faces the risk of a further increase in already-stretched borrowings due to the financial struggles of subsidiary Estar, which owes it nearly $1 billion, Reuters reported. If Estar defaults on the loan - which falls due at the end of September - some analysts believe it could lead to renewed pressure on Mechel's debt covenants, less than six months after they were renegotiated for the second time in as many years. "If the loan is not repaid we will enforce the security, which is the pledge of shares of essentially all Estar assets ...

Several emerging-market countries Monday detailed their plans to boost the International Monetary Fund's coffers by more than $90 billion, to push the total new commitments to about $456 billion, The Wall Street Journal reported. China is pledging $43 billion, while India, Russia, Brazil and Mexico told Group of 20 officials they would commit around $10 billion each. Turkey committed $5 billion, and a handful of others offered about $1 billion.