Headlines

Kazakh bank BTA has agreed a preliminary term sheet with creditors to restructure $11.2 billion of debt, the bank said on Wednesday, triggering a rally in its heavily-discounted bonds. Kazakh sovereign wealth fund Samruk-Kazyna, the bank's majority shareholder, agreed to convert its deposits into equity and issue a $1.592 billion interest-bearing subordinated loan, Reuters reported. Creditors will exchange their interests for a package of new notes and cash, BTA said in a statement.

Eurozone countries would have to sign binding contracts with Brussels, committing them to detailed fiscal reform, according to a draft EU agenda that would increase the bloc’s control over national economic policies. The provision, included in a report distributed to EU countries before this month’s summit, would require all 17 eurozone members to sign on to the kinds of Brussels-approved policy programmes and timelines now negotiated only with bailout countries.

European Internal Market Commissioner Michel Barnier will meet with lawmakers in Brussels Wednesday to advance legislation on increasing bank liquidity and capital requirements–and limiting banker bonuses– which has faced months of delays, The Wall Street Journal Real Time Brussels blog reported. Talks on the CRD-IV proposal, introduced by Mr. Barnier more than a year ago, have stalled as the European Parliament argues against efforts by the Commission to temporarily water down the liquidity provisions, among several other sticking points. While Mr.

Russia’s regional governments have no chance of defaulting on their debt even as they increase their borrowing levels, Finance Minister Anton Siluanov said, Bloomberg reported. “Investors often ask about the possibility of default in the regions -- there can simply be no such thing,” Siluanov said at a conference organized by VTB Capital in Moscow today. “That’s ruled out. Perhaps 15 years ago there was tension of this kind, but now it’s impossible.” Russian regions will increase borrowings this year, he said in another speech at the Federation Council, the upper house of parliament.

Shareholders have been quietly shoved aside in the court-ordered restructuring of Sino-Forest Corp. — and they feel a lack of legal counsel is partly to blame, the Financial Post reported. Last week, veteran Bay Street lawyer Joe Groia agreed to take up the case of disgruntled Sino shareholders, who are furious about their treatment during the CCAA process. But he may be too late.

Europe's fragile banking system should be protected by building a firewall between a lender's retail operations and its more risky trading activities and forcing executives to take losses when their banks fail, according to an expert report, the Associated Press reported. The recommendations are one part of the European Union's efforts to figure out how to right troubled banks and prevent a similar crisis in the future. A committee led by Erkki Liikanen, the governor of the Bank of Finland, put together the report, which was requested by the European Commission, the EU's executive arm.

Spanish unemployment rose 1.7% in September from August, the country's labor ministry said Tuesday, evidence that unemployment in the euro zone's fourth-largest economy has yet to peak as Spain struggles to emerge from a deep contraction, The Wall Street Journal reported. More Spaniards have give up and are looking for work elsewhere.

Unemployment in the euro zone hovered at a record 11.4 percent in August, according to data released on Monday, underscoring the pain inflicted by the slowing world economy and the financial problems plaguing many of the countries that share the euro, the International Herald Tribune reported. Unemployment in the 17 nations that use the euro was at 11.4 percent in August, according to Eurostat, the statistical agency of the European Union.

Spain is ready to request a euro zone bailout for its public finances as early as next weekend but Germany has signaled that it should hold off, European officials said on Monday. The latest twist in the euro zone's three-year-old sovereign debt crisis comes as financial markets and some other European partners are pressuring Madrid to seek a rescue program that would trigger European Central Bank buying of its bonds, Reuters reported. "The Spanish were a bit hesitant but now they are ready to request aid," a senior European source said.

Greece’s government submitted its 2013 draft budget on Monday, outlining enormous spending cuts as the country’s foreign lenders returned to resume talks over a broader austerity package in exchange for the rescue money the country needs to meet expenses, the International Herald Tribune reported. The draft budget spells out about $10 billion in spending cuts and savings for 2013.