Headlines

The U.K. on Thursday unveiled an extraordinary series of measures designed to insulate the British financial system and economy from the euro zone's deepening crisis, The Wall Street Journal reported. Chancellor of the Exchequer George Osborne and Bank of England Gov. Mervyn King announced plans to flood banks with cheap funds in a dual attempt to jump-start lending to British households and businesses and to fend off potential financial problems at big U.K. lenders. The programs resemble some of the emergency measures enacted by central banks in Europe and the U.S.

Spain's borrowing costs jumped to a record Thursday, fanning concerns that the €100 billion ($125 billion) aid package planned for its banks won't suffice to stave off a much larger bailout for the entire country, The Wall Street Journal reported. Spain agreed last weekend to a bank-recapitalization plan it hoped would restore investor confidence in the country's credit-worthiness. Instead, investors have continued to jettison Spanish debt amid concerns that the deal for as much as €100 billion in aid will saddle the government with more debt at a time of deepening economic malaise.

A U.S. federal judge refused Wednesday to enforce Mexican glass maker Vitro SAB's controversial debt restructuring in a closely watched bankruptcy case that threatened to sever the cross-border business cooperation between the two nation's legal systems, The Wall Street Journal reported. Judge Harlin D. "Cooter" Hale of the U.S. Bankruptcy Court in Dallas sided with bondholders in rejecting Vitro's bid, in what has been called one of the most important cases decided under Chapter 15, the section of the U.S. Bankruptcy Code governing international insolvencies.

Two holding companies of the embattled Ligresti family, which controls Italy's second-biggest insurer Fondiaria-SAI, were declared bankrupt on Thursday, muddying the waters of a plan by insurer Unipol to save its troubled peer, Reuters reported. A Milan court declared bankruptcy on the Sinergia and Imco holdings of the Ligrestis, rejecting a request from the firms' lawyers for more time to draw up a proper debt restructuring.

Central banks from major economies stand ready to take steps to stabilize financial markets by providing liquidity and preventing a credit squeeze if the outcome of Greek elections on Sunday causes tumultuous trading, G20 officials told Reuters. A senior U.S. official cautioned that the Greek election will not provide "the definitive signal on what happens next" in the euro zone debt crisis.

Helicopter equipment and repair company Northstar Aerospace Inc. is filing for creditor protection in both Canada and the United States while it arranges the sale of its business for more than US$70 million, the Winnipeg Free Press reported. The troubled Chicago-area concern said Thursday that its U.S. subsidiaries, Northstar Aerospace (USA) Inc., Northstar Aerospace (Chicago) Inc., Derlan USA Inc. and D-Velco Manufacturing of Arizona Inc. have filed Chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware. Meanwhile, Northstar Aerospace (Canada) Inc.

France is pressing the EU to adopt a financial stability package to stem the eurozone crisis, believing negative market reaction to the €100bn bailout of Spain’s banks shows the need for more comprehensive action, the Financial Times reported. Ahead of the EU summit due on June 28, Paris is set to propose a package of measures to put the European Central Bank in charge of bank supervision and to use the European Stability Mechanism, the new €500bn eurozone rescue fund due to come into force next month, to recapitalise banks directly.

Crédit Agricole SA is making contingency plans to abandon its Greek bank or merge it with a conglomerate of domestic banks in the event of Greece leaving the euro zone, according to a person with direct knowledge of the plans, The Wall Street Journal reported. The admission offers the starkest evidence yet of international companies preparing for the worst in Greece, just days ahead of elections that could set it on a path to leave the currency union.

The biggest threat to the survival of the euro may not be a Greek exit. It may be the Balkanization of Europe's banking system, The Wall Street Journal reported. Financial markets are braced for the growing likelihood that Greece will abandon the euro sooner or later. That raises the prospect that another euro member will leave, but it's ever easier to cast Greece—with its crippling government debt and political chaos—as sui generis. A bigger deal is the unraveling of the decadelong cross-border integration of European banks.

The journey from the Bank of Japan to the Diet, the country’s parliament, takes about 10 minutes by taxi on a good day and is one that Masaaki Shirakawa knows all too well, the Financial Times reported. The BoJ governor has been summoned to appear before the nation’s parliament 20 times so far this year, including a double session on Wednesday. At this rate he will smash his annual performance record of 24 days, set in 2009.