Headlines

The world’s 20 biggest economies are likely to agree to increase the resources of the International Monetary Fund by between $400 billion and $500 billion (€306 billion and €382 billion), rather than the $600 billion initially sought by the fund, Group of 20 officials have said, the Irish Times reported. The extra money is to give the fund, a lender of last resort to governments, more fire-power to fight the sovereign debt crisis, triggered by unsustainable policies in euro zone countries such as Greece, Portugal and Ireland.

Public debt has received most of the spotlight since the European debt crisis flared up more than two years ago. But private-sector debt is arguably a more intractable problem, and governments, particularly in the euro zone, appear unlikely to embrace bold policies that would ease its burden on the European economy, The Wall Street Journal Brussels Beat blog reported. The origin of the private-debt problem is mortgages: Real-estate prices soared in a number of European countries, and banks were willing to lend ever-larger sums for home purchases.

Insolvent Nortel Networks Corp. has been granted a stay of proceedings until July under court surpervised creditor protection to allow the company to continue with its restructuring activities. The now defunct company said Friday that the Ontario Superior Court of Justice has granted Nortel and its subsidiaries an extension under the Companies' Creditors Arrangement Act until July 31, CanadianBusiness.com reported on a Canadian Press story. Nortel's court protection has been extended several times.

Video games retailer Game Group's Spanish operations have been bought out of administration by investment firm OpCapita, with an eye to eventually selling them on, OpCapita said on Friday, Reuters reported. The private equity firm, owner of British electrical goods retailer Comet, has already bought the larger British operations of Game out of administration.

A property developer in China's Hangzhou city has filed for bankruptcy protection, falling victim to the government's two-year campaign to rein in property prices and pointing to wider problems ahead in the country's real-estate market, The Wall Street Journal reported. Analysts said the financial woes of Hangzhou Glory Real Estate Co., a small developer, won't drag down other firms in the hard-hit property sector. But they said that other weaker players could see similar strains.

Spain's central government will be able to intervene within nine months in the finances of autonomous regions that do not comply with strict deficit reduction rules under a fiscal stability law passed by the lower house of Parliament on Thursday, Reuters reported. Prime Minister Mariano Rajoy, of the centre-right Popular Party, hopes the law will help persuade investors and Spain's European partners that the country can crack down on overspending in Spain's 17 autonomous regions. The bill now goes to the Senate, where it is expected to pass.

Bankers’ bonuses across Europe would be capped at no more than their fixed salaries under strict new curbs sought by senior lawmakers in response to continued public anger over financial sector pay, the Financial Times reported. In a sign that Brussels is hardening its stance on banker pay, European Union parliamentarians are drawing up new caps on bonuses to be included in the bloc’s latest bank capital rules.

Sino-Forest Corp has asked a Canadian court to extend creditor protection granted to the Chinese forestry company last month until July 9, saying it would create certainty for potential buyers considering a bid for its assets, Reuters reported. The Ontario Superior Court's current order of protection under Canada's Companies' Creditors Arrangement Act expires April 29. The company, accused of fraudulently exaggerating its assets, said the allegations had paralyzed its business. Sino-Forest's Toronto-listed shares tanked last June after a short-seller made allegations against it.

A group of Conservative MPs is calling on the government to reform the UK’s bankruptcy laws so they are fairer to small businesses and sole traders, which they say are liable to exploitation by banks, the Financial Times reported. Proposals on how to change the law – to be published on Friday by the Free Enterprise Group of Tory MPs – include updating the Law of Property Act so banks have fewer powers over borrowers’ assets, and extending the administration procedure to small businesses that are not registered as limited companies or partnerships.

A senior European Central Bank member has played down the prospect of the debt burden arising from the State’s banking crisis being eased, saying that such a move would undermine confidence in the country, the Irish Times reported. Speaking in Dublin today, Jorge Asmussen said that “any desire to offload this debt could have dire consequences”. He added that seeking to reduce the debt would signal that the current debt level was not sustainable.