Headlines

The next couple of months will be crucial for the future of troubled savings banks, The Korea Times reported. One problem after another has beset the sector and jeopardized the entire financial industry. But there is little guarantee that all the problems have been exposed. Chances are that there may be more and, if this proves true, it is likely that they will surface by August. The impact may renew the sense of crisis within the financial sector, depending on the seriousness of any problems that are uncovered.

The French government has opened the door to a compromise in the stand-off over Ireland’s corporate tax rate, saying it will take into account Ireland’s “singular situation” in deciding its stance, the Irish Times reported. Amid signs that Paris and Berlin are waiting for a gesture from Ireland, government spokesman François Baroin said no decision had been taken on whether to maintain French opposition to Ireland’s request for a reduction in the interest rate on its bailout loans. “The discussions are continuing.

Far away from the battle to contain the nuclear crisis at the Fukushima Daiichi nuclear power plant, investors are increasingly edgy about a related issue: the fate of Tokyo Electric Power, the stricken plant’s operator, the International Herald Tribune reported. The physical damage from the accident at the Fukushima Daiichi nuclear power plant has been so widespread that even conservative estimates of compensation claims amount to tens of billions of dollars — a burden that could render Japan’s largest utility insolvent.

Indebted real estate developer Nakheel said on Thursday it had secured over 98 percent, or near unanimous, approval for its $10.9 billion debt restructuring plan from banks, Reuters reported. Under Nakheel's restructuring proposal, trade creditors would receive repayment through 40 percent cash and 60 percent in the form of a $1.63 billion Islamic bond, expected by the end of the first half.

Auckland property developer David Henderson has been declared bankrupt by an order made in Auckland's High Court, The National Business Review reported. The office of Mr Henderson's lawyer, Daniel Grove, said the order was made in judgment by Associate Judge David Abbott issued yesterday at 5pm. The judgment ends Mr Henderson's long-running battle against the IRD, which is owed $3.6 million. Proposals by Mr Henderson to repay 4 cents in the dollar to creditors owed $130 million had dragged proceedings over recent months, but last night they were apparently rejected by creditors.

This weekend marks three months since an earthquake and tsunami swept a large swathe of Japan. The disaster only gets worse for the Tokyo Electric Power Company, or Tepco, owner of the ill-fated Fukushima Daiichi nuclear plant. This week, investors tripped over themselves to sell their shares, dragging the stock price to its lowest-ever level before a bit of a rebound, The Wall Street Journal reported in a commentary.

Bank of Ireland has painted a worst-case scenario where the State’s stake would rise to 87 per cent if no bondholders accept its debt for cash or shares proposals and investors shun a subsequent rights issue, the Irish Times reported. The bank said it planned to issue shares at between 11.3 cent and 11.8 cent a share to subordinated bondholders taking up a debt-for-equity swap before July 7th. This compares with yesterday’s closing price of 14 cent.

Nortel Networks Corp.’s U.S. and Canadian elements are awaiting word about their bid to steer a $4 billion intercompany cash dispute into the courts of their home countries over the protests of European divisions of the dissolving company, the Bankruptcy Beat blog reported. The money was raised in a global liquidation of the Toronto-based telecommunications-equipment maker, which foundered in 2009 and abandoned hope of getting back on its feet in the recession. Nortel U.S. and Nortel Canada say they need an assist from U.S.

After years of housing prices gone wild, China's property bubble is starting to deflate, The Wall Street Journal reported. Residential prices are heading downward in some major cities, damping some undesired real-estate speculation but raising the prospect that the Chinese economy may slow more rapidly than anticipated with profound consequences for global growth. Real estate is a foundation of China's phenomenal growth record in the past two decades, and its health is crucial to China's construction, steel and cement sectors.

The Bank of Korea will weigh an interest-rate increase tomorrow as swelling household debt and weakness in the global economy pose threats to growth, Bloomberg reported. Nine of 17 economists expect the benchmark rate will stay unchanged at 3 percent, while eight forecast an increase of a quarter of a percentage point, a Bloomberg News survey shows. Officials must decide whether protecting the nation’s expansion is more important than taming inflation that’s exceeded a 4 percent target ceiling each month this year.