Headlines

The European Central Bank will start to hold regular meetings with the European Union’s new bank supervisor to keep a closer eye on risks to financial stability, ECB vice president Vitor Constancio said today, the Irish Times reported. Historically low interest rates and unconventional monetary polices to support economic recoveries with “too low rates of inflation” are causing some markets to overheat, Mr Constancio warned. Among them is property, whose boom in the early 2000s helped set the stage for the financial crisis.

China has signalled it will resist calls for aggressive measures to prop up its flagging property market, even as house prices continue to drop, the Financial Times reported. People’s Daily, the Communist party’s main mouthpiece, said in a commentary on Monday that the property market was in a “normal adjustment period” and accused domestic developers, speculators and foreign banks of exaggerating the slowdown in order to put pressure on authorities to adopt heavy-handed stimulus policies.

The major shareholder of the South Korean operator of the ferry on which hundreds of high school students drowned in April has applied for receivership, a court said on Monday, Reuters reported. Chonhaiji Co Ltd, a ship block maker and the major shareholder of ferry operator Chonghaejin Marine Company, lodged its application at the Changwon District Court last week, a court official said. Chonghaejin Marine owned the Sewol, which sank on April 16 on a routine journey between the mainland port of Incheon and the holiday island of Jeju.

European leaders will consider calls for an interpretation of EU budget rules that gives more emphasis to economic growth, according to the draft of a document being circulated before a summit in Brussels this week, the Irish Times reported. The document, which European Council president Herman Van Rompuy is drawing up in consultation with Italy, the next country to hold the rotating EU presidency, marks an effort to reset the EU agenda away from the budget cuts and tax squeezes that characterised the initial reaction to the euro zone debt crisis.

Argentina asked a U.S. judge on Monday to issue a stay of his ruling against the country in its case against "holdout" creditors, as it sought to avoid a new default that would further punish an economy already slipping into recession, Reuters reported. The move is the latest twist in a 12-year-old battle with investors who refused to take part in bond restructurings after Argentina failed to pay about $100 billion of debt in 2002. Without a stay on a ruling by U.S.

Photon Publishing, which produces the prominent solar industry periodical, Photon International, has entered insolvency proceedings in the court of Aachen, Germany, PV-Tech reported. According to details of the filing published by the court, Andreas Ringstmeier has been appointed temporary insolvency lawyer for the proceedings. News of Photon Publishing’s insolvency come only weeks after its parent company, Photon Holding, also began temporary insolvency proceedings due to what the company said was an unpaid tax bill.

Turning its back on fiscal austerity, the Spanish government presented a broad package of income and corporate tax cuts on Friday that are scheduled to begin before next year’s general election, the International New York Times reported. The cuts roll back some of the tax increases that Prime Minister Mariano Rajoy began putting into effect shortly after his conservative Popular Party swept to power in 2011 by winning a parliamentary majority. The next election is scheduled to take place by November 2015.

European companies that raise finance are taking on levels of debt not seen since the financial crisis as they adjust to the prospect of low interest rates for the foreseeable future, the Financial Times reported. The ratio of debt to company earnings, or “leverage multiples”, for all European transactions were 5.1 times earnings in the first quarter of 2014, above the 10-year average (4.8 times) for the first time since 2008. The European Central Bank’s decision to cut a key interest rate this month has exacerbated a mismatch in supply and demand for yield from investors.

The City’s dramatic revival means inner London is now the only part of the UK to have returned to pre-recession levels of job creation, The Independent reported. A TUC report to be published today reveals a two-speed recovery in Britain’s economy with the capital booming while other parts of the country continue to struggle. The TUC Touchstone pamphlet – Equitable Full Employment: A Jobs Recover for All –paints a picture of a static labour market with people clinging grimly on to the jobs they have outside the capital.

Major Chinese banks want to manage their own bad debts, attracted by the outsize profits being earned by recovery firms, in a sign of confidence that investments in internal risk assessment teams are set to pay off, Reuters reported. If they are right, it may mark the end of a buyer's market for a distressed debt pile that has topped $100 billion (58.78 billion pounds), benefiting bank shareholders at the expense of asset-management companies such as China Cinda Asset Management Co.