Headlines

Rating agency Moody's warned on Wednesday that financial distress will rise among Chinese companies amid a slowing economy and a government reform agenda which is intended to allow markets to play a decisive role. But policy easing and government support would prevent corporate distress from rising so much it could cause systemic risk to onshore and offshore markets, it said. The agency also underscored the worsening covenant quality of property high yield bonds, although these agreements offered more protection than those in other regions.

The British government is ready to exit the banking business, even if it means that it will record a loss on some of its holdings, the International New York Times reported. George Osborne, the chancellor of the Exchequer, said in a speech here on Wednesday night that the government would begin to sell down the 80 percent stake that it holds in the Royal Bank of Scotland. The speech was at the Lord Mayor’s annual banquet for the financial industry at the Mansion House in the City of London. The government is projected to sell some R.B.S. shares at a loss — at least initially.

Greece has submitted yet another last-minute economic reform proposal to its bailout creditors — and its creditors have once again dismissed it as lacking, the Financial Times reported. The back-and-forth was the latest document exchange between Athens and Brussels as Greece tries to break a months-long impasse and gain access to desperately needed bailout cash. The process has become numbingly familiar in recent weeks — so much so that the European Commission has even given it a name: “paperology”.

In a related story, The Wall Street Journal Real Time Brussels blog reported that if Greece wants to avoid defaulting on its debts, a deal has to be found within days. But back-of-the-envelope calculations by Real Time Brussels show that the Athens government and its creditors may have until the winter to seal a third bailout deal for the country. Here is how: Greece’s decision last week to bundle this month’s payments to the International Monetary Fund means its first major redemption, €1.6 billion, is on June 30.

Dilma Rousseff stepped up her campaign to rescue Brazil’s flagging economy, announcing an infrastructure package worth almost R$200bn ($65bn) on Tuesday, the Financial Times reported. Brazil’s president outlined plans to sell to the private sector new concessions to build and operate nearly 7,000km of roads, as well as four large airports and a number of ports and railways. Ms Rousseff said the aim of the package was to “invest to revive economic growth”.

With youth unemployment near a 15-year high and the government planning to raise the retirement age, intergenerational conflict over jobs is rising in South Korea, Bloomberg News reported. The jobless rate for workers aged 15 to 29 touched 11 percent earlier this year and is about four times higher than for those aged 40 and above. At the other end of the spectrum, Korea has an underdeveloped pension system and the highest elderly poverty rate in the OECD, as companies push employees in their fifties into early retirement to contain costs.

The Economic and Social Research Institute (ESRI) has said the Government should consider a speedier sale of State-owned banks such as AIB to boost competition in the mortgage market and ease borrowing costs, the Irish Times reported. In new research published with its quarterly economic commentary, the body found that the relationship between the European Central Bank policy rate and standard variable mortgage rates (SVRs) in the Irish banks weakened further after 2011. This was on top of negative credit growth across all sectors of the Irish economy.

The Canberra Eye Hospital is in voluntary administration and its owners, who include pioneering eye surgeons, appear to be in a dispute over the sale of the business with shareholders, The Canberra Times reported. One of the founders, Dr Leo Shanahan, said the company had $2.3 million in the bank 15 months before it went into voluntary administration in about January.

The Reserve Bank of India has provided banks, which are struggling to cope with a mountain of bad debt, new ammunition to deal with defaulting companies, The Economic Times reported. On Monday, the banking regulator issued new norms for Strategic Debt Conversion (SDR) which will give lenders the right to convert their outstanding loans into a majority equity stake if the borrower fails to meet conditions stipulated under the restructuring package. Allowing loan conversion will now be a precondition for all debt restructuring deals.

Greece and its creditors are discussing an extension of the country’s bailout program through March 2016, people familiar with the talks said, an offer aimed at breaking a protracted standoff over the terms for fresh aid and averting a Greek default, The Wall Street Journal reported. The proposal, first presented last week, is part of European officials’ efforts to prod the government in Athens to agree to painful concessions in exchange for rescue funds.