Headlines

Chinese firms must get approval from bond investors before they restructure their assets, China's top economic planning agency said, in a move aimed at containing default risks from its pile of local government debt. The order by the National Development and Reform Commission (NDRC) confirms a Reuters report last week and thwarts any plan by indebted local governments to move assets out of their affiliated firms when they struggle to repay loans.

Banks across Europe are retrenching in efforts to shield themselves from the continent's financial crisis and an increasingly bleak international economic outlook, The Wall Street Journal reported. Some banks are scrambling to dump government bonds and cut credit lines in southern Europe's economic laggards, while others are stockpiling cash. They are also firing thousands of workers and warning about a growing number of red flags they see among customers. On Tuesday, U.K.

The Swedish labor union, Unionen, which represents 1,000 of Saab Automobile's 1,600 unpaid white-collar employees, said Tuesday it will send its first payment requests this week, giving the troubled car maker only a few days to find the money to pay wages and avoid bankruptcy, Dow Jones Daily Bankruptcy Review reported. Salaries were due to be paid July 27 but when no money arrived, the union began gathering any members' pay slips that hadn't been honored in preparation for sending payment requests.

The Bank of Cyprus on Monday urged the government to take immediate action to prevent the country from becoming the fourth euro-zone member to seek a bailout from the European Union, The Wall Street Journal reported. The call from the commercial bank—the island's largest financial institution—comes as discussions among Cypriot lawmakers on spending cuts appear increasingly strained. "There is no more time left," the bank said in a statement. "We are at a crucial crossroad where we will be judged by history.

While the financial world was watching Capitol Hill last week, offering up febrile prayers for a ceiling-smashing bill, the International Monetary Fund quietly wondered whether France could hang on to its platinum credit card, The Wall Street Journal Agenda blog reported. Last Wednesday it warned that the country would miss its 3% budget deficit target for 2013 unless it took further steps to cut spending, which were also needed to safeguard—guess what—its credit rating.

The National Financial Monitoring Committee President has emphasized the need to restructure Vietnam’s commercial banking system if the country did not want to lag behind the rest of the world, VOV News reported. Vu Viet Ngoan told reporters on the sidelines of the ongoing National Assembly meeting in Hanoi that Vietnam’s financial system was rated as “weak” in the pre-crisis period and that the world was now rushing to restructure the global financial system in order to increase working capacity and reduce risk.

The International Monetary Fund's UK expert has said the government should be ready to cut taxes and boost the supply of money if Britain's flagging economy suffers a prolonged period of weak growth, high unemployment and low inflation, The Guardian reported. On the day that the monthly health check of manufacturing showed the sector sinking back into recession for the first time in two years, Ajai Chopra warned that ministers would need to be nimble if the economy performed less well than the IMF has been anticipating.

Ferrier Hodgson, the administrators of Whitcoulls' previous owners, REDgroup Retail, have proposed that its unsecured New Zealand creditors be paid out at 3c in the dollar, The New Zealand Herald reported. The proposal, or deed of company arrangement (DOCA), will be put to creditors at a so-called "'watershed" meeting set down for Thursday. "Based on our investigations, we do not believe that any dividend would be payable to unsecured creditors in any of the companies should they be placed in liquidation," said Ryan Eagle, administrator and Ferrier Hodgson partner.

Bankruptcy work may have slowed for restructuring firms in the U.S., but London is calling. And so is Paris, Frankfurt and Reykjavik, Dow Jones Daily Bankruptcy Review reported. Read more.

Chinese banks can withstand a 50% decline in property prices, the chairman of the country's banking regulator said, citing the results of the latest stress tests, The Wall Street Journal reported. Liu Mingkang told state-run China Central Television on Friday that the tests aren't a reflection of the regulator's view on China's property market, but they show banks will be able to press ahead with curbs on credit to the property sector.