Headlines

China’s local governments may have more than 20 trillion yuan ($3.2 trillion) of debt, former Finance Minister Xiang Huaicheng said, almost double the figure given in a 2011 report by the National Audit Office, Bloomberg reported. The combined debt of China’s central governments and the nation’s provinces and cities may currently be more than 30 trillion yuan, Xiang, who served as finance minister from 1998 to 2003, said at the Boao Forum for Asia. Local governments had 10.7 trillion yuan of debt at the end of 2010, the auditor said in its report.

Spain's Pescanova, one of the world's largest fishing companies, is filing for insolvency after a month of boardroom battles ended in stalemate and put the future of the debt-laden group at risk. Negotiations with creditors are deadlocked and the group is at odds with its auditors amid an atmosphere of mistrust and management infighting, sources told Reuters. "It's a boat that's drifting, but it hasn't sunk," a banking source told Reuters.

Gyorgy Matolcsy, the governor of Hungary’s central bank , on Thursday revealed a package of measures potentially worth up to €4.6bn designed to stimulate growth in Hungary’s flagging economy, the Financial Times reported. Mr Matolcsy, who caused controversy as the architect of Hungary’s “unorthodox economic policy” when economy minister from 2010 until last month, said the plan, dubbed Funding for Growth, would provide cheaper credit to small and medium-sized businesses and reduce foreign exchange risks to creditors.

Brazil's central bank appointed a committee on Thursday to investigate the reasons behind last year's collapse of Banco BVA SA for an additional 120 days, giving potential buyers more time to consider acquiring the mid-sized lender, Reuters reported. The central bank seized the Rio de Janeiro-based bank on Oct. 19, citing deteriorating financing conditions and a breach of regulations. At the time, regulators gave the bank's administrators 90 days to find a buyer or face liquidation.

New Bank of Japan Gov. Haruhiko Kuroda quickly and dramatically put his stamp on the long-beleaguered central bank, implanting a policy grand in substance and simple in presentation—a stark contrast with his predecessor, who favored incremental steps, emphasizing the complexity and the risks, The Wall Street Journal reported. Using placards with bright red print to explain the complex package of new policies, Mr. Kuroda boiled it all down to the number two: 2% inflation in two years by doubling the bank's purchase of bonds and doubling the monetary base.

European officials have been determined to mend the region's financial market after seeing it torn apart along national lines during the economic crisis. That effort suffered a blow with the radical surgery prescribed for Cyprus's banks as part of March's bailout deal, The Wall Street Journal Brussels Beat blog reported. The agreement will see large depositors in Cyprus's two big, internationally active banks absorb steep losses. Money transfers to and from the island are now sharply restricted.

Restructuring specialist Hilco is set to throw British entertainment retailer HMV a lifeline in a 50 million pound deal that will save 2,500 jobs, Reuters reported on a Sky News story. The deal, which could be struck as soon as Friday, will see HMV emerge from administration, Sky News said on its website, with the chain expected to be run by incumbent HMV executives together with newly-appointed Hilco executives. As part of the deal, Hilco will acquire about 130 HMV stores and all nine outlets operating under the Fopp brand, Sky News said.

According to Cyprian newspaper Fileleftheros, Cyprus Airways is about to fold. Because of the cutting of government funds the Cyprian airline company is facing bankruptcy, Fileleftheros reports. According to the newspaper, the Ministers for Traffic, Trade and Labor presented three scenarios about the future of the crippled company: the immediate shutdown of the corporation, the liquidation after the holiday season in summer or the continuing of the air traffic.

Egypt needs IMF money to stay afloat, but the international lender is demanding tough subsidy cuts from an already-embattled government, The Christian Science Monitor reported. President Mohamed Morsi is facing decision time on a national financial crisis that dwarfs the one Sadat faced 35 years ago. President Morsi's government recently announced a rationing plan for subsidized bread that it claims won't affect the poor.

Cyprus's bank restructuring, a condition for international aid it needed to stave off bankruptcy, will force the Mediterranean island to scramble for new ways to generate wealth, Reuters reported in an analysis. If it fails, international lenders may have to do what they wanted to avoid and which Germany and its northern European allies may baulk at - give Cyprus more money. Nicosia will get 10 billion euros (8.58 billion pounds) over three years from the euro zone and the International Monetary Fund.