Headlines

An impediment to private enterprise and a major risk for banks has been the lack of a viable insolvency law. Ironically, UAE, which is an important international financial and business hub, has functioned without effective insolvency laws, which hurt its international reputation, Gulf News reported in an analysis. Prior to the global financial crisis of 2008, business failures were dealt with in an ad hoc manner and conflicts, when they rose, were often resolved through informal arrangements, facilitated by external negotiators.

Poor access to credit has been — and remains — one of the biggest clouds hanging over the tepid recovery in Italy’s economy, which has just started to grow this year after three years of stagnation and recession, the Financial Times reported. Small and medium-sized companies, which form the backbone of the Italian economy, were hit the hardest as banks retrenched in the wake of the economic and financial crisis that left them saddled with high volumes of non-performing loans (NPLs).

Time is running out to save the British steel sector, steelmakers and unions warned on Friday following news of hundreds more possible job cuts, Reuters reported. Tata Steel, the biggest steelmaker in the country, is expected to cut around 1,200 jobs at its Scunthorpe plant in northern England, a union source said earlier. The firm has already cut thousands of UK jobs since it entered the sector in 2007. A Tata spokesman said it continued to review the performance of its business, without addressing reports of job losses.

Norske Skogindustrier ASA’s senior and junior bondholders have presented competing plans to restructure the Norwegian papermaker’s $1 billion of debt, according to people familiar with the matter. Rothschild and Akin Gump Strauss Hauer & Feld, which are advising a group holding Norske Skog’s 290 million euros ($329 million) of senior bonds due 2019, met with the company to discuss a possible debt-for-equity swap, said two people, who asked not to be identified because negotiations are private.

Although dealing with delinquent loans is one of the biggest challenges facing the government of Prime Minister Alexis Tsipras and the country’s creditors, the issue is so knotty that it was not included in the bundle of economic reforms the Greek Parliament was debating this week. Instead, it will be taken up later, the International New York Times DealBook blog reported. Officially, more than 40 percent of loans issued by Greek banks are seriously in arrears. By some estimates, the rate tops 50 percent, if loans that have gone sour in recent months are included.

A legal fight is looming over a $3bn bond owed by Ukraine to Russia after Moscow refused to join other bondholders in a debt restructuring and both sides said they were prepared to take the matter to court, the Financial Times reported. Russia emerged on Thursday as the lone holdout in the $18bn restructuring deal offered by cash-strapped Kiev — involving a 20 per cent writedown on the value of its debt and extended repayments — which other private shareholders voted to accept.

British banks may be forced to increase the capital they keep on hand by as much as $5 billion to comply with new rules intended to protect their British retail banking businesses in a financial crisis, the Bank of England said on Thursday, the International New York Times reported. The central bank is requiring British lenders with more than 25 billion pounds, or about $38 billion, to wall off their retail banking operations in the country by 2019, a practice known as ring-fencing.

Lacking only façade work, wiring and paint, the red-brick duplexes lining a remote street in the Chinese port city of Qingdao could, if required, hit the market in a matter of days. That presents a problem for China and the world. Marketed as villas, the duplexes in the sprawling Shimao Noble Town aren’t quite complete and don’t have permits for sale. That makes them invisible to both national and local statisticians trying to get a handle on the size of China’s massive glut of empty and unfinished homes.

China Huarong Asset Management, the largest manager of distressed debt in China, is looking to raise up to $2.5 billion in an initial public offering in Hong Kong this month, the International New York Times DealBook blog reported. The bank is offering 5.77 billion shares at 3.03 to 3.39 Hong Kong dollars, or 39 cents to 44 cents, a share, according to people with direct knowledge of the offering terms. That means it could raise $2.3 billion to $2.5 billion. It has secured commitments worth $1.6 billion from 10 “cornerstone” investors, or large institutional buyers.

Risky lending by the banks is not the solution to the housing crisis, the deputy governor of the Central Bank, Stefan Gerlach, has said. Referring to rules on loan to value (LTV) and loan to income (LTI) ratios introduced by the Central Bank’s earlier this year, he said an examination of what had happened when the Irish property market crashed showed that loans with high ratios had very high default rates, the Irish Times reported.