The German Bank Restructuring Act, which takes effect next year, could be a template for a European Union-wide law, Moody's Investors Service Inc. said Monday, Dow Jones Daily Bankruptcy Review reported. The new German bank restructuring regime "is an important step in forming the post-crisis European regulatory landscape," the rating agency said. Moody's expects the European Commission "to scrutinize the legislation and to consider it as a blueprint for its own legislative proposal" due next spring.

German chipmaker Infineon said it would defend itself vigorously against legal action by the insolvency administrator of Qimonda, its former memory chip unit, seeking an unspecified payment, Reuters reported. "We are firmly convinced that we have done nothing wrong," an Infineon spokesman said, adding that the company would defend itself against this action and pursue all avenues of legal proceedings. Qimonda collapsed in 2009 as chip prices plunged and then filed for insolvency after failing to hammer out details of a rescue package in time.

The Spanish government approved new austerity measures and a limited economic stimulus package to ease investor fears about its debt - and insisted again it was taking strong steps to right its ailing economy, the Associated Press reported. Markets responded positively to Friday's actions after weeks of turmoil, but the country was thrown into chaos again after air traffic controllers unexpectedly staged a massive sickout just hours after top government officials endorsed a move to partially privatize key airports. At least 200,000 travelers were stranded on the eve of a long holiday weekend.

European finance ministers are debating whether the €750 billion bailout fund for euro zone countries should be enlarged to boost confidence in the currency, the Irish Times reported. Amid fear that Ireland’s rescue may soon be followed by an intervention in Portugal or Spain, the possibility of increasing the fund is one of a range of options for discussion tonight as euro zone finance ministers try to find a way of gaining the initiative in the sovereign debt crisis.

With markets increasing pressure on Spain, Prime Minister José Luis Rodriguez Zapatero is running out of the political capital necessary to force through difficult reforms that could ease investor concerns, The Wall Street Journal reported. in the wake of Ireland's €67.5 billion ($88.7 billion) bailout, sovereign-debt concerns have risen in Spain and Portugal. Pressure is building on Mr.

Former Anglo Irish Bank Chief Executive David Drumm will have to testify about his assets and conduct running the fallen Irish financial giant, under a deal his attorneys struck in bankruptcy court in Boston on Thursday, Reuters reported. The testimony could paint a much fuller picture of the life that Drumm has been living in Massachusetts after stepping down from the helm of Anglo-Irish at the end of 2008, just before the government nationalized the bank. The collapse of the bank was among the factors leading the country to seek an emergency international aid package last month.

ATEBank will reduce its workforce by 1,000 persons, cut payouts by 10%, shut down branches and sell all its non-bank holdings as part of its restructuring plan, Capital.gr reported. The state run bank will go through a triple merger with the Loans and Consignments Fund (LCF) and the Hellenic Postbank so as to create a strong state run banking pillar. The plan includes restructuring of ATE, which must get rid of its non-bank holdings while the LCF will be cut in two. From this procedure, an SA in the form of a bank will emerge that will merge with ATEBank.

Former financial regulator Pat Neary has told one of the investigations into Anglo Irish Bank that it was not surprising banks would carry out transactions to put “a gloss” on their published accounts. Mr Neary also told investigators he was never shown in advance a balance sheet for Anglo for the year ending September 30th, 2008, by anyone at the bank, the Irish Times reported. The investigations are examining the €7 billion in deposits placed with the bank by Irish Life and Permanent (IL&P) over the bank’s 2008 financial year-end.

Spain and Italy, the countries that with Portugal appear most at risk from being enveloped by the euro zone's deepening debt turmoil, are leading an effort to spur more decisive action from the European Central Bank in order to prevent the crisis from spreading further, The Wall Street Journal reported. A €67.5 billion ($88.2 billion) bailout plan for Ireland that European Union governments signed Sunday has offered little relief from the crisis, dashing the hopes of European leaders. Since then, borrowing costs for the three governments rose sharply.

Iceland is betting its decision two years ago to force bondholders to pay for the banking system’s collapse may help it rebound faster than Ireland, Bloomberg reported. Iceland’s taxpayers face a smaller debt burden than their Irish counterparts, where the government’s guarantee of the financial system in 2008 backfired this year when the banks came close to insolvency. Iceland’s budget deficit will be 6.3 percent of gross domestic product this year and will vanish by 2012, compared with the 32 percent shortfall in Ireland, the European Commission estimates.