Headlines

Across Europe, banks, households and governments are pulling in their horns at the same time. It is a depressing recipe for a classic "balance-sheet recession" as the public and large parts of the private sector try to repair the excesses of the boom and rebuild balance sheets, The Wall Street Journal Brussels Beat blog reported. One part of the economy, however, is an important exception to the rule: companies, particularly large ones. Across Europe, corporations are sitting on a mountain of cash. The trouble is, they aren't spending much of it.

Myanmar's government is likely to allow foreign banks into the country by 2015 and to also give Myanmar's central bank more independence in setting rates, a senior official at Myanmar's biggest commercial bank said Friday, The Wall Street Journal reported. Myanmar's financial system remains primitive by international standards. The country only recently got its first ATMs, and credit cards aren't widely used.

A new wave of scandals involving Chinese companies listed overseas could hit New York and Hong Kong in the coming weeks as the annual results season get under way with auditors on high alert for fraud, the Financial Times reported. Auditors are under great pressure this year to detect discrepancies in their clients’ results, having faced embarrassment and legal action in 2011 following dozens of accounting scandals at Chinese companies listed in North America.

The parent of an aircraft maintenance company spun off by Air Canada is expanding in El Salvador even as its Canadian arm liquidates its assets after terminating more than 2,600 employees, Reuters reported. Aveos, which shut its doors in Canada earlier this week, has corporate ties with El Salvador's Aeroman, with Aero Technical Support & Services Holdings, a closely held company domiciled in Luxembourg, owning both of them. While Aveos may count the Salvadoran unit as part of its network, the two operations are independent of each other, said Ernesto Ruiz, chief executive of Aeroman.

The European Central Bank is hoping that a trillion euros in cheap loans will buy the eurozone enough time to make a future round of bailouts unnecessary, The Washington Post reported on an Associated Press story. The Frankfurt-based bank’s surprisingly large salvos of discount cash in December and February offered a bonanza for banks and bruised government bonds alike. The loans, offered at 1 percent interest and repayable in three years, were immediately plowed by banks into shorter-term bonds of Spain, Italy and other debt-troubled eurozone members paying much higher returns.

As slogans go, “restructure the promissory-notes repayment schedule” doesn’t have quite the same tub-thumping ring as “burn the bondholders”. But as Ireland has moved from the anger to the bargaining stage of economic grief, it has realised that coming to a deal over €31 billion ($41 billion) in promissory notes which the government issued to two failing banks is more important than defaulting on their remaining unsecured bondholders, The Economist reported. In 2008 Ireland’s previous government said it would stand behind the debts of the country’s tottering banks.

The economic slowdown weighing on both China and Europe may test Beijing's tolerance for a more flexible currency, thus creating competing policy interests for both regions, Dow Jones reported. Thursday's grim Chinese and euro-zone manufacturing data underscored how synchronized the world's largest economies have become. The 17-nation currency zone is widely expected to see a recession this year, which has bolstered forecasts for a weaker euro. Yet China has, at least for now, become the bigger worry.

Portugal’s town halls face default amid 9 billion euros ($12 billion) of debt unless the government provides aid soon, said Fernando Ruas, president of the nation’s association of municipalities, Bloomberg Businessweek reported. “At a company we call it insolvency,” Ruas said in a telephone interview from Lisbon on March 21. “It could happen that some town halls could have to restructure their debt if the government doesn’t intervene.” Ruas blamed a sharp decline in money transfers from the government in Lisbon to municipalities for their growing financial woes.

Treasury Holdings has been given leave to seek a judicial review of Nama's decision to call in its loans and appoint a receiver to various assets, the Irish Times reported. The group has overall debt of some €2.7 billion and Nama acquired some €1.7 billion of its loans in 2010. While granting leave today to Treasury to bring the case, Ms Justice Mary Finlay Geoghegan stressed she was not expressing any definite view on the legal and factual issues raised by the group, other than that it had met the necessary threshold of raising "substantial" issues to be tried.

Germany's 16 states are discussing ways to help the staff of insolvent drugstore chain Schlecker who face redundancy as the retailer is due to close more than 2,000 stores, Reuters reported. Unlisted Schlecker, which competes with privately-held peers Rossmann and dm, filed for insolvency in January after struggling to secure funds against a gloomy economic backdrop.