The U.K. Treasury is planning a new initiative to buy billions of pounds of corporate bonds issued by small and midsize companies to free up capital for struggling firms unable to tap banks for loans, The Wall Street Journal reported. Chancellor of the Exchequer George Osborne unveiled the new "credit easing" initiative during his address to the Conservative Party's annual conference here on Monday.

Lenders to Ferretti are exploring a second debt restructuring as the Italian luxury yacht maker is running short of liquidity and could breach covenants on its 600 million euros ($805 million) of loans, banking sources said, Reuters reported. The lenders, which own Ferretti following a 2009 debt for equity swap, are working with the debt advisory group at Rothschild and Ernst & Young to determine how much new money the company needs and how much more debt it needs to write down, the sources added.

Few doubt any more that the European banking system needs to be recapitalised. The debate has moved on to who will get hurt in the process. And unlike in the last round of government recaps in 2007 and 2008, where most holders of bank debt escaped largely unscathed, the pain is likely to be felt by bondholders, International Financing Review reported. Surprisingly, therefore, financial indices have rallied on suggestions that governments are getting closer to shoring up banks’ balance sheets – but the bounce may prove short-lived.

Greece will miss a deficit target set just months ago in a massive bailout package, according to government draft budget figures released on Sunday, showing that drastic steps taken to avert bankruptcy may not be enough, Reuters reported. The dire forecasts came while inspectors from the International Monetary Fund, EU and European Central Bank, known as the troika, were in Athens scouring the country's books to decide whether to approve a loan tranche. Without that installment, Greece would run out of cash as soon as this month.

With little fanfare, Spanish taxpayers have become substantial bank proprietors since the collapse of Lehman Brothers three years ago marked the start of Europe’s financial and economic crisis. The Fund for Orderly Bank Restructuring, known as the Frob from its Spanish initials, has seized control of six groups of cajas or savings banks and is threatening to take stakes in two more if they fail to find private investors in the next month, the Financial Times reported.

Shares in Norway's troubled oil production equipment contractor Sevan Marine ASA traded 63% higher Friday after the company said it will sell three production, storage and offloading vessels to Canada's Teekay Corp. in a deal that will give the cash-strapped company long-term financing, Dow Jones Daily Bankruptcy Review reported. Teekay, a provider of marine services to the petroleum industry, will also subscribe to a new issue of Sevan Marine shares to gain a significant shareholding, Sevan Marine said, but declined to give further details.

Austria's insolvent A-TEC Industries will be broken up and sold off in parts after sale talks with a potential buyer failed, the Austria Press Agency said on Friday, Reuters reported. "Due to the time restrictions and differing expectations of the involved parties, the negotiations have fallen through," APA quoted Czech investment group Penta Investments as saying. Last week an offer fell through for the troubled Austrian group from another suitor, Contor Industries GmbH.

The German parliament has voted by an overwhelming majority in favour of measures bolster the €440bn eurozone rescue fund, and give it new powers to buy bonds and recapitalise weak banks, in a move that lifted financial markets and boosted the euro, the Financial Times reported. The decision was greeted in Brussels as removing a big potential road block to further action to deal with the debt crisis, although several more eurozone parliaments still need to sign off on the package.

A new front in the euro crisis is opening up: what to do if Greece's second bailout package, worth €109 billion ($147.8 billion) and agreed to in July, isn't enough, The Wall Street Journal reported. That risk is real. But with Greece reaching the limits of austerity, at least in the near-term, there are only two options for filling any shortfall. Either euro-zone governments and the International Monetary Fund must dig deeper into their pockets, or Greece has to unpick its deal with bondholders to secure more debt relief.

The National Asset Management Agency has sold loans associated with the Claridges, Connaught and Berkeley hotels in London, it was confirmed today, the Irish Times reported. The loans, which funded the acquisition of the hotels in 2005, were given to the Maybourne Hotel Group by two Irish banks. Nama acquired the loans at the end of June 2010 from the banks. The Maybourne Hotel Group was headed by Derek Quinlan, who has become a Nama debtor.