Headlines

Talks between Greece and its private sector creditors over a debt restructuring plan are "on track," a senior finance ministry official said Thursday, with the outlines of a final deal expected to be reached by late next week, Dow Jones reported. "We are completely on track. Exploiting the momentum, by the end of the next week we could have the final outline for a deal with the private sector," the official said.

China's banking regulator took new steps to clamp down on risks in the financial sector, even as a report from Standard & Poor's said political considerations might force authorities to grant banks some leeway on loans to local governments, The Wall Street Journal reported. The China Banking Regulatory Commission on Thursday said it has told trust companies, which are lightly regulated investment vehicles, to stop selling investment products backed by commercial paper held by banks.

Seat Pagine Gialle SpA (PG), Italy’s largest phone-book publisher, may extend a proposal to restructure its debt to senior bondholders, two people familiar with the matter said, Bloomberg reported. The senior noteholders, who own about 750 million euros ($957 million) of Seat Pagine bonds, may be involved to broaden approval for the plan and avoid possible legal challenges from them, the people said, who asked not to be identified because the deliberations are private.

ICE Futures Europe has suspended the membership of London-based emissions brokers CarbonDesk Limited until further notice, the exchange said, after the firm said it could no longer pay creditors and named administrators. Last November CarbonDesk Group PLC said in a statement that its subsidiary had entered into a Company Voluntary Arrangement (CVA) as it no longer had enough cash to pay its debts, and it named administrators to take over management. A CVA enables a company to reach an agreement with its creditors on the repayment of outstanding debts over a period of time.

Sino-Forest Corp., the Chinese timber company fending off allegations of fraud, said it reached a waiver agreement with bondholders, reducing the risk of bankruptcy, Bloomberg reported. Holders of a majority in principal of its senior notes due 2014 and 2017 agreed to waive the default arising from the company’s failure to release its third-quarter financial results on time, Hong Kong- and Mississauga, Ontario-based Sino-Forest said today in a statement.

Angela Merkel has given effusive praise for the economic reforms introduced by Italy’s new government of technocrats, marking a clear seal of approval from the German government – in stark contrast to its long-standing doubts about the previous Italian administration, the Financial Times reported. Speaking after her first bilateral summit with Mario Monti, who succeeded Silvio Berlusconi as Italian prime minister in November, the German chancellor lauded the “extraordinarily important and remarkable measures” already taken by his technocratic administration.

Banks are hoarding the European Central Bank’s record 489 billion-euro ($625 billion) injection into the banking system, thwarting attempts by policy makers to avert a credit crunch in the region, Bloomberg reported. Almost all of the money loaned to 523 euro-area lenders last month wound up back on deposit at the Frankfurt-based central bank instead of pouring into the financial system, ECB data show. Banks will use most of the three-year loans to meet their refinancing needs for this year and next, analysts at Morgan Stanley and Royal Bank of Scotland Group Plc estimate.

Germany's economy contracted in the fourth quarter, putting it at risk of a shallow recession at a time when euro-zone countries struggling with their debts are looking to the bloc's biggest economy to give the region a lift, The Wall Street Journal reported. Germany's stagnation, after two years of strong growth, could fuel further international calls for the country to stimulate growth. Economists said Germany's nearly balanced budget and ability to borrow money at low cost gives it the scope to boost growth that few others in Europe have.

Negotiators for banks and governments are working to complete a promised debt restructuring for Greece that will slice in half what the nation owes its private bondholders, The Wall Street Journal reported. But the deal sets up other governments in the euro zone to bear any additional burden if—many analysts say when—Greece needs more help to get out of its deep fiscal rut. The concerns about additional costs have made some European capitals wary of consummating the deal, said people familiar with the talks, and are among the reasons they have dragged on for months.

A property developer who owes Ireland's so-called bad bank some 300 million euros ($383 million) followed his similarly indebted brother in declaring himself bankrupt in Britain, insolvency papers showed on Wednesday, Reuters reported. Brothers Raymond and Danny Grehan, who bought a Dublin site in 2005 for a record 82 million euros per acre, were ordered by an Irish court to pay the state-run National Asset Management Agency (NAMA) 312 million and 308 million euros respectively.