Headlines

Three years ago Sweden was regarded as a role model in how to deal with a global crisis. The nation’s exports were hit hard by slumping world trade but snapped back; its well-regulated banks rode out the financial storm; its strong social insurance programmes supported consumer demand; and, unlike much of Europe, it still had its own currency, giving it much-needed flexibility. By mid-2010 output was surging, and unemployment was falling fast. Sweden, declared The Washington Post , was “the rock star of the recovery”. Then the sadomonetarists moved in.

Italy's two largest banks, UniCredit and Intesa Sanpaolo, are teaming up with U.S. private equity firm Kohlberg Kravis Roberts to pool some of their bad loans into a vehicle that will provide fresh capital for the struggling companies, the Financial Times reported. The preliminary agreement, which also involves restructuring adviser Alvarez & Marsal, will be announced on Tuesday, the paper said on its website on Monday. The announcement is likely to say the four companies have signed a memorandum of understanding but are still working out many details, FT said.

Chinese Premier Li Keqiang’s plan to introduce deposit insurance is meant to comfort the nation’s savers as bad loans mount. In the bond market, it’s fueling speculation he’s preparing to let some banks collapse, Bloomberg News reported. Authorities may tolerate failures of smaller banks once depositor safeguards are in place, Kwong Li, chief executive officer of China Lianhe Credit Rating Co. said.

Facing a growing problem of debt defaults, the Chinese government should deploy 100 billion to 200 billion yuan ($16 billion to $32 billion) this year to help restructure indebted companies, a former adviser to the central bank said Thursday, The Wall Street Journal reported. "In the second half of the year, the government should promote debt restructuring in certain sectors," economist Li Daokui said at a news briefing, adding that the funds should be taken from the budget.

Mt. Gox customers with frozen bitcoin accounts are targeting Chief Executive Mark Karpeles, arguing in court papers he is unfit to lead the Japanese bitcoin exchange through its U.S. bankruptcy case, The Wall Street Journal reported. In papers filed Tuesday in U.S. Bankruptcy Court in Dallas, lawyers for several Mt. Gox customers pointed out Mr. Karpeles has been accused of fraud and said he should no longer have power over Mt. Gox's U.S. assets in his official role as Mt. Gox Co.'s foreign representative.

Monte dei Paschi di Siena, Italy’s third-largest bank, plans to offer investors as much as 5 billion euros, or $6.9 billion, in new stock as it fights to avoid nationalization and braces for stress tests of its balance sheet by European regulators, the lender announced on Friday, the International New York Times DealBook blog reported. The bank’s board approved the plan in an afternoon meeting, agreeing on €2 billion more than a previous management proposal that shareholders balked at in December.

Brazil’s federal police have opened an investigation into former billionaire Eike Batista for financial crimes, including insider trading, manipulation of markets and money laundering, Brazilian media reported on Friday. If the police probe leads to criminal charges against Batista, it would be yet another major blow for a businessman once hailed as Brazil's model entrepreneur and symbol of its economic success. Batista’s EBX oil, mining and logistics empire, which two years ago was valued at $60 billion, collapsed last year in a mountain of debt and massive filings for bankruptcy protection.

Creditors for the parent company of collapsed discount store chain Chickenfeed are waiting to retrieve tens of millions of dollars, as lengthy proceedings to recover the funds are still in the early stages, The Examiner reported. Retail Adventures, owned by Tasmanian businesswoman Jan Cameron, was Australia's largest discount variety store operator but went into liquidation in February. Liquidators are now pursuing more than $100 million from Ms Cameron for insolvent trading, preferential payments and an invalid loan.

Royal Bank of Scotland has been cleared of deliberately engineering the collapse of some of its business customers, but has decided to sell off the £3.2bn commercial property portfolio at the centre of the row, The Guardian reported. The state-backed lender was accused last November in a report by a former government adviser, Lawrence Tomlinson, of putting some distressed commercial clients out of business in order to scoop up assets for its own West Register property business.

Facing a growing problem of debt defaults, the Chinese government should deploy 100 billion to 200 billion yuan ($16 billion to $32 billion) this year to help restructure indebted companies, a former adviser to the central bank said Thursday, The Wall Street Journal reported. "In the second half of the year, the government should promote debt restructuring in certain sectors," economist Li Daokui said at a news briefing, adding that the funds should be taken from the budget.