Headlines

Hundreds of people rushed on Tuesday to withdraw money from branches of two small Chinese banks after rumours spread about solvency at one of them, reflecting growing anxiety among investors as regulators signal greater tolerance for credit defaults. The case highlights the urgency of plans to put in place a deposit insurance system to protect investors against bank insolvency, as Chinese grow increasingly nervous about the impact of slowing economic growth on financial institutions. Regulators have said they will roll out deposit insurance as soon as possible, without giving a firm deadline.

Lenders to Pescanova SA (PVA), the Spanish fishing company trying to avoid liquidation, won’t back a restructuring plan proposed by shareholders, Bloomberg News reported. Creditors will seek to seize control of Pescanova after an April 15 deadline set by a bankruptcy court for the plans from shareholders Damm SA, the Spanish brewer, and Luxempart SA, according to two people familiar with the matter, who asked not to be identified because they’re not authorized to speak about it. The banks plan to find an industrial partner to manage the company, the people said.

Even before the loss of its Flight MH370, Malaysian Airline System (MAS) was bleeding cash, prompting talk that it may need another financial rescue from state investor Khazanah Nasional Bhd, its majority shareholder, Reuters reported. The flag carrier's cash and short-term investments at end-December were close to $1.2 billion - less than its average operating costs of the two previous quarters, and a signal that it may soon need fresh funding or bank loans.

Grant Thornton has been given leave to appeal to the Privy Council a decision by the Bermudian Court of Appeal in a case that impacts on the ability of courts to assist foreign liquidators, Economia reported. According to the firm, which is acting as liquidator to a Cayman Islands company, the issue is not clear and as a result has been a “hot topic” among lawyers and cross border insolvency professionals for several years. The Privy Council will now consider arguments involving the current case – Singularis Holdings Ltd v PwC – and an earlier one, PwC v Saad Investments Company Ltd.

Spain has proposed a 2.3-billion-euro ($3.2 billion) rescue of nine failed motorways, two sources with knowledge of the matter said on Tuesday, in the latest state bail-out linked to the excesses of the country's property and construction boom, Reuters reported. The government plans to create a state company to house the failed toll roads, which will issue a 30-year bond of around 2.3 billion euros to pay the motorways' debt while forcing a 50 percent haircut on creditor banks, the sources said.

Chinese steel mills were suffering a medley of woes in mid-March as sales slowed, production levels slumped and profits plunged, according to an investment bank survey published on Tuesday that foreshadows the rising risk of debt defaults in the world’s largest steel producer, the Financial Times beyondbrics blog reported.

The Co-operative Bank PLC was in fresh turmoil Monday after saying it needs another £400 million ($659.4 million) in capital, just months after securing a £1.5 billion rescue deal, The Wall Street Journal reported. The bank, which was saved from likely failure last year by bondholders and its part owner, Co-operative Group Ltd., said it was hit by costs around products wrongfully sold to customers and other unexpected charges, forcing it to tap shareholders for more cash.

The Russian government is braced for the country’s capital outflows to soar to $70bn in the first three months of the year as investors seek cover from the fallout of President Vladimir Putin’s Ukrainian land grab, the Financial Times reported. Andrei Klepach, Russia’s deputy economy minister, said on Monday that capital outflows in the first quarter were expected to be closer to the top end of a $65bn-$70bn government estimate, as fears of tighter sanctions hit the economy.

European Union antitrust authorities ordered Luxembourg on Monday to hand over information on its tax practices as part of a broader investigation into fiscal deals that allow some major global corporations to pay little or no tax in the region, The Wall Street Journal reported. The European Commission, which acts as the 28-member bloc's top antitrust regulator, is scrutinizing whether tax arrangements for companies like Apple Inc. and Starbucks Corp. violate EU state-aid rules, which forbid tax breaks or subsidies that provide a competitive advantage to favored groups.

The pace of migration of rural Chinese to cities, a dynamic hailed by Premier Li Keqiang as key to the nation’s development, is set to slow by a third in coming years, deepening economic-growth concerns, Bloomberg News reported. A government report released this month projected a 6.3 percentage-point rise in the share of people living in cities from 2013 to 2020 -- down from a 9.4-point gain the previous seven years. Nomura Holdings Inc. estimates that slower urbanization will slice as much as half a percentage point from annual gross domestic product growth over the next half decade.