Headlines

Ever since China’s gargantuan stimulus of 2009, which was unleashed to repel the global financial crisis, people have worried about how the debts incurred would be repaid. This week the finance ministry provided a partial answer, in the form of a scheme to restructure the liabilities of local governments, the most indebted of China’s public institutions, The Economist reported. Local governments will be allowed to swap 1 trillion yuan ($160 billion) of their existing high-interest debts for lower-cost bonds.

The International Monetary Fund’s bailout of Ukraine is based on a fragile cease-fire holding between Kiev and Russia-backed separatists in the east, IMF officials said Thursday, The Wall Street Journal reported. The IMF’s assumption of a “non-intensification” of the conflict just a day after U.S. officials said militants had already violated the deal underscores the frailty of the bailout program.

The German and Dutch central bank presidents, two of the eurozone’s toughest hawks, have warned that monetary easing would allow France, Italy and other economically vulnerable countries to shirk unpopular reforms, the Financial Times reported. Jens Weidmann of the Bundesbank and Klaas Knot, head of De Nederlandsche Bank, delivered their broadsides just days after Mario Draghi, the European Central Bank chief, launched quantitative easing, a huge €1.1tn bond-buying programme designed to boost flagging economic growth.

TSB Banking Group, the lender spun out of Lloyds Banking Group last year, said on Thursday that it had received a preliminary takeover offer from Banco Sabadell of Spain, the International New York Times DealBook blog reported. The deal, if completed, would greatly expand Sabadell’s presence in Britain, where it primarily offers business accounts and banking services to Spanish companies. Under the terms of the offer, Sabadell would pay 3.40 pounds in cash for each share of TSB, valuing the company at £1.7 billion, or about $2.6 billion, TSB said.

The debt burden among Canadians has hit a fresh record high as nagging household imbalances begin to feel the pinch of a new problem: Slower income growth, The Globe and Mail reported. Debt imbalances are measured chiefly by the ratio of total household credit-market debt (mortgages, other loans and credit cards) to disposable income, and that ratio hit 163.3 per cent in the fourth quarter of last year, up slightly from the previous record 162.7 per cent in the third quarter, Statistics Canada reported Thursday.

Growing Greek antagonism toward Germany is coming at a bad time for Athens as it seeks a better debt deal with its European partners, the International New York Times reported. A demand on Tuesday night by the Greek prime minister, Alexis Tsipras, for wartime reparations from Germany cast a pall over negotiations for more rescue money for Athens that began in Brussels on Wednesday. Germany, the biggest European lender to Greece, immediately issued a cool response to Mr. Tsipras’s comments, which were made in an address to the Greek Parliament.

Austria's Carinthia province is studying ways to avoid going insolvent under the weight of debt guarantees for defunct lender Hypo Alpe Adria several times its annual budget, the region's government said on Tuesday, Reuters reported. Carinthia, which is in southern Austria, has an annual budget of 2.2 billion euros ($2.4 billion) and would struggle to honour nearly 11 billion euros of backing for Hypo debt that creditors could demand. "Now all consequences...

The International Monetary Fund on Wednesday approved a bigger, high-risk bailout for Ukraine, giving Kiev immediate access to $5 billion of $17.5 billion in emergency IMF credit in another bid to keep the embattled country afloat, The Wall Street Journal reported. Ukraine’s deadly conflict with Russia-backed militants in eastern Ukraine forced the fund to revamp its bailout program as the turmoil pushed the economy into a deep, two-year contraction, fueled a currency free fall, sparked rampant inflation and drained the central bank’s reserves.

In a world convulsed by the rising US dollar, the renminbi looks like a port in the storm, the Financial Times reported. The Chinese currency has slipped just under 1 per cent against the dollar this year, a mere rounding error compared with the Brazilian real’s 14 per cent tumble and the euro’s 12 per cent slide. But for a currency long seen as lacking a reverse gear, the recent drop to a 28-month low is nonetheless gaining attention, with some predicting far more severe problems down the road.

Australia's IFM Investors said on Thursday it had agreed to pay $5.73 billion to buy the bankrupt operator of a major U.S. toll road, making its biggest overseas investment, Reuters reported. IFM Investors, which is owned by 30 Australian pension funds and manages $43 billion, said the purchase of ITR Concession Co LLC gave its investors access to core infrastructure in the world's largest capital market.