Headlines

To boost their deposit levels ahead of an expected year-end regulatory review, Chinese banks have recently accelerated their sales of high-yield investment products to customers, raising new concerns about the financial system and spurring the government to step up its oversight of the products, The Wall Street Journal reported. Since late last month, banks of all sizes have increased their competition to attract deposits from middle-class savers by offering so-called wealth-management products.

European Union authorities are considering launching a legal crackdown on some national regulators for restricting European banks from freely moving funds across national borders, according to officials familiar with the matter, a sign of rising concern about the Continent's financial fragmentation.

Russian billionaire Oleg Deripaska’s Kuban Airlines, the country’s 14th biggest, declared bankruptcy and ceased flying today after running up debt and breaching federal regulations, Bloomberg reported. “The main reasons for stopping the airline’s operations are the difficult financial situation and failure to comply with a number of provisions mandated by new federal aviation rules,” Krasnodar-based Kuban Airlines said in a statement on its website. The carrier filed for bankruptcy at the Krasnodar Region Arbitration Court.

The Greek government is on course to receive a long-delayed €34.4bn aid payment after it fell only just short of its target in a bond buyback programme intended to wipe about €20bn from Athens’ sovereign debt pile, the Financial Times reported. According to people briefed on the transaction, Greece on Tuesday night had received offers from private investors to sell €32bn in bonds back to Athens for an average of 33.5 cents on the euro, in essence agreeing to a 66.5 per cent voluntary loss on their holdings.

US and UK regulators will unveil the first cross-border plans to deal with failing global banks on Monday, outlining proposals to force shareholders and creditors on both sides of the Atlantic to take losses and to ensure sufficient capital exists in the banks’ headquarters to protect taxpayers. Writing in the Financial Times, Martin Gruenberg, chairman of the US Federal Deposit Insurance Corporation, and Paul Tucker, deputy governor of the Bank of England, say this represents the first concrete steps to end the “too big to fail” problem of large international banks.

Italian companies led an increase in the cost of insuring European debt after the collapse of Prime Minister Mario Monti’s government, while sales of corporate bonds slowed. Credit-default swaps on Enel SpA jumped 31 basis points to 246, UniCredit SpA climbed 30 to 325 and Intesa Sanpaolo SpA rose 29 to 304, while Telecom Italia SpA was 15 higher at 292, according to data compiled by Bloomberg. Rome-based utility Enel SpA’s bonds were the worst performers in Bank of America Merrill Lynch’s Euro Non-Financial Index of corporate securities.

UK Coal, Britain's biggest remaining coal miner, said it had avoided an imminent debt default and the closure of operations after completing a major debt restructuring deal with shareholders. But the company, which on Monday changed its name to Coalfield Resources, warned that some mines may need to close unless they lowered costs which rose by over a third between 2005 and 2010. "If (operators) run these mines well, they've got a future for the next decade.

Dana Gas PJSC, whose bondholders include BlackRock Inc and Ashmore Group Plc, completed the restructuring of $920 million of Islamic bonds after agreeing to pay twice the average yield on emerging markets corporate sukuk, Bloomberg Businessweek reported. Dana Gas, which missed sukuk payments in October, will pay bondholders $70 million in cash and split the remaining Shariah- compliant debt into $425 million of convertible bonds and an ordinary sukuk of equal value, the United Arab Emirates fuel producer said in a statement.

A new survey shows that the real unemployment rate in China is double the official level, and layoffs rose sharply among migrant workers in the past year, underlining a challenge for China's new leaders to maintain growth, The Wall Street Journal reported. The survey of 8,000 households shows the urban unemployment rate hit 8.05% in June, up slightly from 8% in August 2011 and nearly twice as high as the official 4.1% rate. The survey was run by Gan Li, an economics professor at South Western University of Finance and Economics in Chengdu.

The billionaire Barclay brothers, who are battling property developer Patrick McKillen for control of three London luxury hotels, have made repeated bids to buy his €300 million in personal debt held by Irish Bank Resolution Corporation, the Irish Times reported. Under the three-part offer, the brothers would pay €150 million for IBRC-held debts on Mr McKillen’s stake in the Berkeley, Connaught and Claridge’s hotels; £50 million for security on other debts, along with offering to return to IBRC 90 per cent of all other debts recovered from Mr McKillen.