Headlines

The battle to control euro clearing once the U.K. leaves the European Union is getting uglier, Bloomberg News reported. LCH, the London Stock Exchange Group Plc unit that dominates euro clearing, wants to stop the European Central Bank from gaining the power to veto its decisions. Eurex Clearing, the Deutsche Boerse AG-owned subsidiary that would probably benefit most if London was stripped of euro clearing, says that clearinghouses should involve the ECB.

In our excitement over what is new, we often miss what is important. The election of Emmanuel Macron has triggered expectations of a Franco-German entente on further fiscal integration in the euro zone. Brexit has given new momentum to proposals for a multi-speed Europe. But behind these speculative possibilities real, profound change is proceeding relatively unnoticed except by technical experts, the Irish Times reported.

A fresh slide for Provident Financial in the wake of last month’s profit warning bucked the trend as the London market recovered from an underwhelming start to the week, the Financial Times reported. Provident was the biggest decliner on the FTSE 100 as a 23 per cent drop in adjusted first-half profits rekindled fears that triggered a 17 per cent fall in shares at the end of June — when the doorstep lender revealed the extent of a botched restructuring of its loan-collection procedures.

It is precisely five years since Mario Draghi declared the European Central Bank ready “to do whatever it takes” to preserve the euro. With the eurozone’s recovery in full swing and the ECB starting to edge towards an exit from stimulus, there could be few better ways to mark the anniversary than a successful sovereign bond issue by Greece — the biggest casualty of the single currency area’s debt crisis, the Financial Times reported.

Novo Banco SA, the Portuguese lender created from the collapse of Banco Espírito Santo SA three years ago, has launched a plan to raise €500 million ($582 million) from a bond exchange—a condition of its takeover by U.S. private-equity firm Lone Star Funds, The Wall Street Journal reported. Pacific Investment Management Co. and other Novo Banco bondholders who wanted to mount their own takeover have challenged the Lone Star arrangement. A successful bond exchange would put the bank a big step closer to securing the Lone Star deal.

Singapore is ranked the second most competitive economy globally by the World Economic Forum, and is actually faster than most other countries in resolving insolvencies involving assets of all kinds, according to the World Bank, Bloomberg News reported. But when it comes to the city’s bond market in particular, resolutions have been slower than in some other major markets, according to restructuring advisers. The speed of such cases is a key focus for investors after the nation suffered an unprecedented S$1.35 billion ($992 million) of local note defaults since November 2015.

The plethora of companies propped up by the European Central Bank will limit policy makers’ ability to withdraw monetary stimulus that’s been supporting the continent’s bond market since the financial crisis, according to strategists at Bank of America Corp, Bloomberg News reported. About 9 percent of Europe’s biggest companies could be classified as the walking dead, companies that risk collapse if the support dries up, according to the analysts.

India is making good progress in dealing with bad loans that are weighing down on the country’s banks, suggesting long-term valuations for the financial industry are set to improve, according to the head of HDFC Bank Ltd, Bloomberg News reported. The resolution of soured debt will help boost valuations, Aditya Puri, HDFC Bank’s managing director, said in an interview at his office in Mumbai.

UK banks offering easy credit risk endangering “everyone else in the economy”, according to a high-ranking official at the Bank of England. Alex Brazier, who is a member of the bank’s Financial Policy Committee, warned in a speech on Monday that “pockets of debt” pose a growing risk, as household incomes are squeezed by rising prices and weak wage growth, the Financial Times reported. Mr Brazier said there were three aspects of household lending that were of particular concern. Terms and conditions on some credit cards and personal loans have been relaxed.

The International Monetary Fund has cut its growth forecast for the UK economy in 2017, its first downgrade since the immediate aftermath of the Brexit vote last year, the Financial Times reported. In an update to its World Economic Outlook, the IMF said annual GDP would expand 1.7 per cent this year, compared to a forecast of 2 per cent growth made in April. The 2018 forecast was unchanged at 1.5 per cent.