Headlines

Consumers have begun to save less and spend more as lockdown measures introduced to curb the spread of the Covid-19 pandemic continue to ease, according to data from Bank of Ireland, The Irish Times reported. The bank’s Savings and Investment Index, which was published on Monday, demonstrates the changing attitudes of Irish consumers as the economy begins to re-open. Compared to the period of full blown lockdown when savings increased significantly, less people are now saving by default.

Policy makers are facing the most economically challenging part of the Covid-19 crisis in avoiding the creation of “zombie” companies, according to the Bank for International Settlements, Bloomberg News reported. Ultra-easy monetary and fiscal support is helping companies avoid a liquidity crunch after the pandemic closed down businesses and demand collapsed. But that stance bears risks longer-term, said Claudio Borio, head of the Basel-based institution’s Monetary and Economic Department.

The Corporate Insolvency and Governance Act (CIGA) received royal assent on 25 June, The Law Society Gazette reported. The Insolvency Service described it as ‘the largest change to the UK’s corporate insolvency regime in more than 20 years… [with] new corporate restructuring tools and temporary easements to give distressed businesses the breathing space they need to get advice and seek a rescue’.

The coronavirus pandemic is taking its toll on the world economy. GDPs of many countries are down as unemployment numbers rise, and companies are shutting up shop, Silicon Canals reported. One of Germany’s largest fintech startups Monedo can now be added to the list as it has filed for insolvency. The fintech’s insolvency application was granted by the Hamburg District Court that has also opened the preliminary insolvency proceedings. The news of Monedo filing for bankruptcy was first reported by Manager Magazin.

Thai Airways International Pcl’s request to restructure its debt as part of bankruptcy proceedings was approved by a bankruptcy court on Monday, sending its share price sharply higher, Reuters reported. The decision by the court, which handles bankruptcy and restructuring requests in Thailand, allows the airline to move ahead with drawing up plans to restructure 245 billion baht ($7.83 billion) worth of debt. It comes as the coronavirus fallout has added to the woes of the airline, which has been struggling since 2012 and in which the government has a large stake.

Greece is the most vulnerable country in the Eurozone to a shock to tourism says DBRS Morningstar, Capital reported. According to the latest forecasts by DBRS, the recession in Greece this year will reach 7%, while the recovery in 2021 is expected to reach 4%. According to the DBRS’ adverse scenario, the contraction of the Greek GDP this year will come to 9% and growth in 2021 will move at a subdued rate of 1.5%.

Credit investors are unconvinced about the ability of the world’s weakest lenders to weather a coronavirus economic slowdown, according to Bank for International Settlements, Bloomberg News reported. The cost of insuring debt from lower-rated banks is yet to fully recover from a virus-fueled blowout, with spreads on credit default swaps tied to high-yield lenders an average of 127 basis points above pre-pandemic levels as of Aug. 21, BIS said in report published on Monday. CDS spreads for BBB tier banks were 30 basis points wider.

An Indian court has ordered the seizure of a tanker belonging to Dubai-based oil trading firm GP Global after a petition from UAE lender National Bank of Fujairah over a loan default, a court document showed, Reuters reported. The Gujarat High Court directed the authorities of Pipavav Port on Sept. 9 to seize the company’s bunkering tanker, GP B3, and detain it until a further court order or until the outstanding loan amount of just over $2 million is paid, a court document seen by Reuters shows. The next hearing is on Sept. 17.

Thai Airways International Pcl, the nation’s flagship carrier, faces one of its biggest challenges in its 60-year history, with a local court set to rule on its debt restructuring on Monday, Bloomberg News reported. The Central Bankruptcy Court will decide whether the airline can proceed with its plan to rehabilitate its debt. The company, which had total liabilities of 332.2 billion baht ($10.6 billion) at the end of June, is one of the nation’s most high-profile debt cases.

When European Union nations agreed this summer to set up a 750 billion euro economic recovery fund in response to the coronavirus pandemic, a major motivation was to avoid a lasting depression in Italy that could tear apart the euro, The Wall Street Journal reported. For Europe, much now hinges on whether Italy can find a useful way to spend its part of the fund: roughly €200 billion, equivalent to $236.95 billion, in EU grants and cheap loans. Astute investments that lift Italy’s ability to grow could help overcome the country’s quarter-century of stagnation.