Headlines

European Union finance ministers agreed on Friday on rules setting the order in which bank creditors would be hit in case of wind-downs, in a bid to accelerate the build-up of banks' capital buffers to reduce the chances of public-funded bailouts, Reuters reported. Under new rules adopted after the 2010-2012 euro zone debt crisis, banks are required to issue loss-absorbing debt that would be used in a liquidation to reduce taxpayers' costs, but that issuance has so far fallen short.

Nothing in Islamic finance or the United Arab Emirates’ laws regarding Shariah-compliant debt has changed since Dana Gas PJSC restructured its sukuk about four years ago, Bloomberg News reported. "What makes the sukuk illegal now?” asks Rizwan Kanji, a partner at law firm King & Spalding LLP. When the gas producer started negotiations with creditors in 2012, the issue relating to mudarabah structures was “clear and settled,” said the Dubai-based lawyer who specializes in Shariah-compliant deals. Since then, there have been no changes in Islamic finance or related U.A.E.

India’s central bank plans to use insolvency laws against more corporate defaulters to speed up resolution of the country’s bad loans that have swelled to $180 billion, Bloomberg News reported. “The clock’s already ticking -- some cases are already before the National Company Law Tribune," said Sanjeev Sanyal, principal economic adviser to the finance ministry. "More lists will be out in the next few months." Cleaning up India’s stressed loans is the biggest priority of Prime Minister Narendra Modi’s government, Sanyal said in an interview in New Delhi.

Takata Corp, the Japanese company facing billions in liabilities stemming from its defective air bag inflators, is preparing to file for bankruptcy as early as next week as it works toward a deal for financial backing from U.S. auto parts maker Key Safety Systems Inc, sources said on Thursday. Takata, one of the world's biggest automotive suppliers, has been working for months to complete a deal with Key Safety, Reuters reported. A person briefed on the matter told Reuters Key was expected to acquire Takata assets as part of a restructuring in bankruptcy.

A decision by a Middle Eastern gas producer to declare its own Shariah-compliant bonds unlawful has baffled investors in the $2 trillion Islamic finance industry, Bloomberg News reported. Sharjah-based Dana Gas PJSC said Tuesday it no longer considered its two Islamic bonds totaling $700 million issued four years ago as Shariah compliant under the United Arab Emirates’ law.

In the wake of Goldman Sachs’s controversial purchase of $2.8 billion of bonds held in Venezuela’s vaults, investors have been trying to quickly figure out what other hidden assets the country might be sitting on. The stakes are high. As the central bank’s officially published foreign-reserve figure dwindles to just over $10 billion, that secretive stockpile might ultimately decide whether the nation averts default or not, Bloomberg News reported. Calculating the value of those securities, as you might expect, is tricky.

Greece and its international creditors have reached a deal on the next stages of Athens’ €86bn bailout, removing the risk that it could default on over €7bn in debt repayments that fall due next month, the Financial Times reported. The deal ends months of uncertainty that have weighed on Greece’s recovery and spooked investors. But while shoring up the country’s immediate economic future, the agreement punts politically difficult discussions on debt relief into 2018.

The Reserve Bank of India aims to stop loan officers from throwing good money after bad. This week, 12 unnamed Indian companies were recommended for referral to the Insolvency and Bankruptcy Code, the Financial Times reported. The upshot is likely to be outperformance by shares in private sector banks with consumer credit exposure. The government push could lead to long workouts for debts amounting to a quarter of all non-performing assets nationally. State-owned banks’ provision levels are likely to be revealed as insufficient.

The euro zone bailout fund has served its main purpose of safeguarding financial stability in the euro zone, but its operations could be improved, a report by an independent evaluator showed on Thursday. The report, the first assessment of the functioning of the European Financial Stability Facility (EFSF) and its successor, the European Stability Mechanism (ESM), was commissioned last year by the chairman of euro zone finance ministers, Jeroen Dijsselbloem, the International New York Times reported on a Reuters story.

French oil services firm CGG said on Wednesday it had filed for bankruptcy in France and the United States as part of financial restructuring to reduce its debt burden. The company, in which the French state public investment bank Bpifrance Participations owns a 9 percent stake, said the restructuring would eliminate $1.95 billion in debt from its balance sheet, Reuters reported.