Headlines

European policymakers are working on "last chance" options to bring Greece's debts down and keep it in the euro zone, with the ECB and national central banks looking at taking significant losses on the value of their bond holdings, officials said. Private creditors have already suffered big writedowns on their Greek bonds under a second bailout for Athens sealed in February, but this was not enough to put the country back on the path to solvency and a further restructuring is on the cards.

U.K. firms were gloomier about their own prospects in July, as the global outlook for trade deteriorated while the euro zone's debt crisis deepened, a trend that signals the country's economy could weaken further in the third quarter, a survey by Lloyds banking Group showed Monday, The Wall Street Journal reported. Hiring intentions among U.K. firms also fell and more companies were downbeat about expected profit margins, the survey showed.

The high street continued to be one of the areas of the economy most affected by the slowdown in growth in the UK, as data showed that the number of retail insolvencies rose 10.3 per cent last quarter even as the overall number of companies failing dropped, the Financial Times reported. There were 426 retail insolvencies recorded for the three months to June 30, according to research by PwC, compared with 386 in the same period in 2011. Retail insolvencies accounted for over a tenth of the overall number of corporate insolvencies in England and Wales recorded in the period.

Some of China’s struggling auto makers, burdened by debt, may be forced into involuntary bankruptcy, the Ministry of Industry and Information Technology said last week, Forbes reported. The Ministry said in a note published on Tuesday that it is considering the introduction of a withdrawal mechanism to force near-bankrupt automakers out of the bloated automotive industry. China has around 1,300 automobile makers, including 171 car, truck and bus makers and more than 900 specialty vehicle manufacturers, according to the government.

China's statisticians get a tough press. After all, it was Europe, not China, whose fudged public finance data helped usher in the latest round of global financial turmoil. The biggest corporate fraud in recent memory isn't China's Sino-Forest, but America's Enron, The Wall Street Journal Heard on the Street blog reported. But a secretive single-party state claiming rapid growth as the rest of the world hovers on the brink of recession naturally arouses suspicion. The official numbers show growth in China's gross domestic product at 7.6% year-on-year in the second quarter.

Political leaders in Greece have agreed on most of the austerity measures demanded by its creditors and are now eyeing pension and wage cuts to find the final 1.5 billion euros of savings still needed, a source close to the talks said on Sunday, Reuters reported. Greece must find savings worth 11.5 billion euros for 2013 and 2014 to satisfy its increasingly impatient lenders, who are currently visiting Athens to evaluate the country's progress in complying with the terms of its latest bailout.

The European Central Bank cast more gloom over the euro zone's outlook Thursday, announcing another fall in lending to the private sector in June, as well as signs of increased deposit withdrawals from troubled banks in southern Europe, The Wall Street Journal reported. The ECB's monthly summary of monetary developments in the euro area offered some crumbs of comfort, as both the narrow M1 and broad M3 money aggregates expanded faster than expected, bolstering hopes that the bank's liquidity injections around the turn of the year were finally gaining traction.

The Irish government returned to the bond markets Thursday after an enforced absence of almost two years, marking an important step in its rehabilitation after its 2010 bailout and providing a rare hint of hope for the euro zone, The Wall Street Journal reported. The Irish government aims to finance itself entirely from the bond markets from 2014, after the last of its bailout loans from the European Union and the International Monetary Fund are disbursed next year.

Two Chinese private equity funds are closing in on a deal to buy the asset management arm of Dexia, highlighting the interest of Asian buyers in European financial assets as banks look to restructure in the wake of the financial crisis, the Financial Times reported. If the sale of the business for about €500m is completed, it would mark the last stage of a break-up of the twice-bailed-out Belgo-French bank, one of the biggest European victims of successive financial crises during the past four years.

Brazil’s consumer-loan default rate fell in June for the first time in three months, as the government’s drive to lower borrowing costs provides relief to indebted families, Bloomberg Businessweek reported. The consumer default rate declined to 7.8 percent from a revised 7.9 percent in May, the central bank said in a report distributed today in Brasilia. The company loan default rate slid to 4 percent from 4.1 percent over the same period.