Headlines

Administrators of the UK arm of MF Global face a larger task than expected, as the UK operation is where most of the group's exposure to shorter-dated European sovereign debt was held, Reuters reported. US$17bn of repo-to-maturity deals involving European sovereign debt have been fingered as the transactions that ultimately forced MF Global, Inc to file for Chapter 11 insolvency in a New York bankruptcy court on Tuesday.

Commercial banks that borrow from the Central Bank of Kenya (CBK’s) emergency lending window more than twice in a week will be investigated, Business Daily Africa reported. In a circular elaborating on the new market-based operations, CBK said banks using the overnight window will also be charged a high penalty above the Central Bank Rate (CBR) that currently stands at 16.5 per cent. “Those banks utilising the CBK Overnight Window will be charged the CBR plus a high penalty.

The leaders of Germany and France told Greece on Wednesday it would not receive another cent in European aid until it decides whether it wants to stay in the euro zone, Reuters reported. They also made clear that saving the euro was ultimately more important to them than rescuing Greece.

The latest Greek government crisis has overshadowed the agenda for a summit of world leaders this week, The Wall Street Journal reported. The Group of 20 industrial and developing economies, meeting in Cannes, France, had hoped to focus much of its attention on the rest of the euro zone, including implementation of last week's European plan to support the currency bloc and on broader global concerns about exchange rates and financial regulation. Instead, they may be back to square one.

It’s “too soon” for China to discuss further bond purchases from Europe’s revamped rescue fund, Vice Finance Minister Zhu Guangyao told reporters in Cannes, France, on the eve of a summit of world leaders, Bloomberg reported. While there are proposals to bolster the European Financial Stability Facility, “there are no concrete plans yet so it’s too early to talk about further investments in these tools,” Zhu said today. Zhu said the rescue fund, already part of China’s portfolio, is an “important tool” to address the sovereign debt crisis.

Italian directories publisher Seat Pagine Gialle SpA is at the center of a dispute with its stakeholders that may see the company put into insolvency if an agreement isn't reached by the end of the month, said market participants Wednesday, Dow Jones Daily Bankruptcy Review reported. Seat PG, with total debt of EUR2.7 billion, stated last week that it wouldn't pay a EUR52 million coupon due on Oct. 31 on its EUR1.3 billion subordinated bond via a special purpose funding vehicle called Lighthouse.

Britain is becoming a nation of debtors, with increasing numbers of people being forced to take out loans or turn to credit cards to pay for essentials, despite the worsening economic forecast, The New Zealand Herald reported. The amount of cash borrowed through cards or loans climbed £629 million ($792.7 million) in September, about a third more than the previous month's increase of £478 million, the latest borrowing figures from the Bank of England suggest. In July the figure stood at just £369 million.

Struggling Indian airline Kingfisher on Wednesday said it was in talks with bankers to reduce high interest rates on its $1.2-billion debt, but denied it was pursuing a fresh loan restructuring, Agence France-Presse reported. Ravi Nedungadi, chief financial officer of the giant drinks group UB group which controls the airline, said in a statement the carrier was attempting to swap high-cost rupee borrowings for lower-cost foreign debt. "The banks are in active consideration of these requests," Nedungadi said.

The Greek government teetered and stock markets around the world plummeted Tuesday after a hard-won European plan to save the Greek economy was suddenly thrown into doubt by the prospect of a public vote, the Associated Press reported. One day after Prime Minister George Papandreou stunned Europe by calling for a referendum, the ripples reached from Athens, where some of his own lawmakers rebelled against him, to Wall Street, where the Dow Jones industrial average plunged almost 300 points.

One day, it might be possible to spend most of a G20 summit discussing the long-run economic reform that the forum was originally set up to promote. This week’s meeting in Cannes will not be that summit, the Financial Times reported. The gathering is set to be dominated by events in Greece, a country that is not even a member of the G20. Not for the first time, attempts by the host country to use the grouping to achieve structural changes – which in any case were progressing slowly this year – have been knocked sideways by the exigencies of immediate events in the global economy.