Headlines

The Indonesian government will no longer bail out commercial banks when they face financial problems, but will instead force the institutions to use their own assets or those belonging to shareholders to raise funds in a crisis, according to a new regulation Parliament passed late last week, The Wall Street Journal reported.

Greece’s bailout negotiators are on the verge of leaving Athens without an agreement on a new set of economic reform measures, a move that would further delay politically sensitive debt relief talks and call into question the future of the €86bn rescue programme, the Financial Times reported. The threat to shut down talks until after next week’s Easter holidays came amid increasing acrimony between Greek leaders and the IMF, which is insisting on more concrete budget savings in order to sign off on the first quarterly review of the new bailout.

China’s central bank governor has warned that the country’s corporate debt levels are too high and are stoking risks for the economy, just as highly-leveraged Chinese companies have gone on an overseas takeover binge, the Financial Times reported. Adding his voice to a recent chorus of concern by senior Chinese officials, Zhou Xiaochuan, governor of the People’s Bank of China (PBoC), told global business leaders meeting in Beijing that the ratio of lending to gross domestic product was becoming excessive.

Argentina settled with an additional 115 individual creditors holding defaulted sovereign bonds for $155 million, Daniel Pollack, the court-appointed mediator in the long-running case, said on Friday, Reuters reported. Pollack's announcement brings the total amount of settlements agreed in principle with U.S. creditors for more than the original $6.5 billion pot of money committed to end the dispute. The most recent settlement also moves Latin America's No. 3 economy closer to ending a festering 14-year legal battle over its historic default.

Here is a lesson on how Chinese debt restructurings play-out: the debtor comes out on top, The Wall Street Journal reported. Embattled Chinese property developer, Kaisa Group, which defaulted on $2.5 billion of bonds almost a year ago announced late Thursday it had made amends with its two dissenting creditors, Farallon Capital Asia and BFAM Partners. The long-drawn-out restructuring is effectively done, barring procedural court approval processes.

Bank of Ireland’s UK subsidiary will not offer mortgages for more than £500,000, according to Des Crowley, chief executive of the division, the Irish Times reported. He said this was designed to reduce the bank’s exposure to modestly-sized, multimillion-pound homes in expensive areas, notably in London. “We’re conservative in the London market, where it is quite heated and it is difficult for first-time buyers in particular to get on to the housing ladder,” he told the Daily Telegraph following the release of the bank’s UK results to the British media.

The African budget airline Fastjet is considering legal action against its second-biggest shareholder, easyJet founder Sir Stelios Haji-Ioannou, after he said the company was at risk of going bust, The Independent reported. In an astonishing escalation of the row between Sir Stelios and Fastjet, the airline yesterday said it was “taking legal advice” after the businessman published a letter stating concerns about the risk of an “insolvency event” in the months ahead.

Catalonia is deliberately flirting with default on its bank loans as the region’s separatist government tries to force the Spanish state to deliver aid payments, according to two people familiar with the situation, Bloomberg News reported.

Norway’s central bank is cutting interest rates to a record low and refusing to rule out going below zero as the collapse in oil prices takes its toll, the Financial Times reported. Norges Bank reduced its key policy rate by 25 basis points to 0.5 per cent despite admitting the move could increase “financial system vulnerabilities” with many worried about the prospect of a housing bubble. “The current outlook for the Norwegian economy suggests that the key policy rate may be reduced further in the course of the year,” said Oystein Olsen, governor of the central bank.

Abengoa’s global ambitions are now the source of its troubles, the International New York Times reported. Saddled with debt from its expansion, the company is scrambling to avoid what would be the largest bankruptcy in Spanish corporate history. Creditors and shareholders are taking the company to court as losses mount and crucial financial support disappears. The company’s changing fortunes, from industry darling to financial invalid, are an extreme example of the challenges facing players in the renewable energy business.