Headlines

The world's debt stock surged by over $12 trillion in the first three quarters of 2024 to a fresh record of nearly $323 trillion, thanks to falling borrowing costs and rising risk appetite, a report by a banking trade group showed on Tuesday, Reuters reported. Large government budget deficits suggest that sovereign debt could rise by a third by 2028 to approach $130 trillion, the report from the Institute of International Finance (IIF), a financial services trade group, found - increasing repayment risks worldwide.

Japan could use a wake-up call over its mountain of debt through credit rating firms warning of the potential for cuts to sovereign bond ratings, according to a government advisor, Bloomberg News reported. “Recent fiscal policy has turned into a popularity contest,” said Mana Nakazora, a credit analyst on an economic panel advising Prime Minister Shigeru Ishiba. “I’d rather that credit rating firms say that they’ll cut ratings” to warn authorities of risk, she said in an interview with Bloomberg on Monday.

Monetary easing by central banks across developed and emerging economies trundled along in November with markets warily gearing up for a new year that could bring tectonic shifts to the global policy making backdrop, Reuters reported. Four of the six central banks overseeing the 10 most heavily traded currencies that held meetings in November lowered their lending benchmarks. Central banks in New Zealand and Sweden each shaved 50 basis points off their interest rates while the U.S. Federal Reserve and the Bank of England delivered 25 bps cuts.

Lloyds Banking Group Plc is selling a significant risk transfer linked to around £1 billion ($1.3 billion) of UK mortgages, which have been subject to modifications such as term extensions, Bloomberg News reported. Lloyds is seeking credit protection on a portfolio of home loans, which are mostly performing but are subject to high regulatory capital charges because they were previously delinquent. The transaction, which may be priced in coming days, also includes a portion of mortgages currently in arrears. Terms of the transaction, including size, are subject to discussion with investors.

Colombia’s finance chief has been hit with fresh accusations in an alleged corruption scandal, adding to complications for President Gustavo Petro just as the government tries to navigate a deepening fiscal crisis, Bloomberg News reported. Finance Minister Ricardo Bonilla, who has just a month to secure approval for higher taxes meant to cover a 12 trillion peso ($2.7 billion) shortfall in next year’s budget, is now facing significant opposition in Congress, with lawmakers calling for his resignation.

Brazil’s economy once again shot past expectations in the third quarter, bolstered by hefty consumer and government spending that’s fanning above-target inflation and rattling markets, Bloomberg News reported. Official data released on Tuesday showed that gross domestic product expanded 0.9% in the July-September period compared to the second quarter. The expansion came on the back of robust domestic demand that has held firm in the face of double-digit borrowing costs.

Tunisia’s government is looking to the central bank to help repay its external debt for a second straight year, as the economy languishes after a potential International Monetary Fund bailout stalled, Bloomberg News reported. The state needs to borrow as much as 7 billion dinars ($2.2 billion) from the regulator in 2025, Finance Minister Sihem Boughdiri told parliament on Monday, proposing an addendum to next year’s budget that lawmakers subsequently approved.

Swedish bankruptcy levels are expected to exceed 10,000 this year, a figure that hasn’t been seen since a financial crisis in the 1990s spread from the banking sector into the wider economy, according to credit reference agency Creditsafe i Sverige AB, Bloomberg News reported. “So far this year, 9,197 limited companies have gone bankrupt, an increase of 24% compared to the same period last year and a material 64% more than two years ago,” Creditsafe Chief Executive Officer Henrik Jacobsson said in a statement Monday.

Germany will assume more than €600 million ($629 million) of debt that its development bank extended to Northvolt AB for the construction of a battery plant in the country, Bloomberg News reported. The federal government will this month reimburse lender KfW for the value of a convertible bond and related costs, a spokesman for the economy ministry said in an emailed response to questions from Bloomberg. Privately-held Northvolt filed for bankruptcy protection in the US last month after a desperate bid to secure rescue funding fell short.

Electric bus manufacturer Lion Electric Co. is temporarily laying off about 400 workers and halting operations at its Illinois factory to save cash after receiving a short-term lifeline from its lenders, Bloomberg News reported. The Saint-Jerome, Quebec-based company made the announcement after a Saturday deadline to meet its obligations to key creditors passed. The extensions until Dec. 16 apply to a credit agreement with a syndicate of lenders and a loan provided by the Caisse de Depot et Placement du Quebec and Finalta Capital Inc., Lion said in a statement Sunday.