Headlines

Italy poses a big risk to the stability of Europe, despite the recent ceasefire between the new coalition government and the markets — and Brexit will not protect Britain from the fallout, some of Britain’s top financiers have warned. Norman Blackwell, chairman of Lloyds and one of the few senior pro-Brexit figures in the City, suggested Italy’s political turmoil could easily recur because of the challenges of maintaining the fiscal discipline necessary for a European single currency, the Financial Times reported.

China’s government has been trying to break the country’s addiction to ever-rising debt, but its effort to crack down on easy money is starting to hit growth in the world’s second-biggest economy, the International New York Times reported. Beijing has been concerned in recent years about the increased reliance on credit to keep the economy expanding briskly, worrying that it could lead to a financial crisis, or to a long period of stagnation like the one in Japan after the real estate market burst in the early 1990s.

British lawmakers are pressing the accounting regulator to divulge details of the misconduct that prompted it to slap unprecedented fines on accountants PwC and a former senior partner over a 2014 audit of now-collapsed retail chain BHS, Reuters reported. The Financial Reporting Council (FRC) overnight fined PricewaterhouseCoopers, one of Britain’s Big Four accounting firms, a record 6.5 million pounds ($9 million) and former partner Steve Denison 325,000 pounds over the audit.

A unit of China’s state-owned conglomerate CITIC has filed a request for antitrust approval to take full control over Czech assets of troubled private Chinese group CEFC China Energy, Czech competition watchdog UOHS said on Wednesday. The Czech assets involved are the CEFC Europe firm, holding interests in hotels, real estate, engineering and a sports club and Lapasan, through which CEFC holds a majority stake in beer brewer Lobkowicz, Reuters reported. The UOHS did not mention Czech airline Travel Service in which a China-based CEFC entity holds 49.9 percent interest.

Coupons on 525 million pounds ($701.40 million) of debt underpinned by retirement home operator Four Seasons will not be paid, the issuers of the notes said on Wednesday. The owners of Four Seasons recently agreed a deal with investment firm H/2 Capital Partners to restructure the group, transferring ownership to a new owner controlled by its creditors, Reuters reported. The boards of Elli Finance (UK) Plc and Elli Investments, the issuers of the notes, said their respective boards “have concluded that they will not be in a position to pay the coupons due under the Notes on 15 June 2018”.

Credit Suisse will get $385 million from its bankruptcy claim against Lehman Brothers Holdings, the Swiss bank said on Wednesday, less than the $1.2 billion it sought from the failed U.S. investment bank for terminated derivatives transactions, Reuters reported. The deal, which still must be approved by a U.S. court, also means the Swiss bank’s Strategic Resolution Unit (SRU) will take a roughly $70 million impact in the case dating to 2009, Credit Suisse said.

Before it led a buyout deal for one of Li Ka-shing’s Hong Kong skyscrapers last year, few had heard of China Energy Reserve & Chemicals Group Co. Now it’s getting famous for the wrong reasons, roiling the $1 trillion Asian dollar-bond market with a default, Bloomberg News reported. China Energy blamed the delinquency on about $2 billion of notes on a “tightening in credit conditions” that most other borrowers have so far weathered while making their payments.

Markets welcomed the International Monetary Fund’s (IMF) $50 billion rescue stabilization package last week, which seems to be stabilizing the peso. But the financial umbrella will be costly, a Bloomberg View reported. Rightly or wrongly, Argentines blame the IMF for precipitating their country's worst economic crisis. In the eyes of many voters, the mere association will damage President Mauricio Macri’s standing.

As Angola seeks to attract foreign investors to help diversify its oil-dependent economy, the country’s biggest trading partner, China, looks set to take a leading role, but the considerable leverage it is able to wield may leave Africa’s third-largest economy short-changed, the Financial Times reported. With Angola heavily indebted to China, Beijing may drive some hard bargains, as has happened in south Asian countries deeply in hock to the Chinese.

Russian gold miner Petropavlovsk, which is battling a shareholder attempt to remove its board, has agreed to provide a last minute bridge loan to a Hong Kong iron ore company in which it owns a 31 per cent stake, the Financial Times reported. The London-listed company said it would provide $29.75m to IRC to enable it to meet a June payment on a loan to ICBC, which was used to fund a mine near the border of China. Petropavlovsk also said it is in “advanced” talks with a major Russian bank to refinance the entire $340m project loan.