Headlines

Iceland's parliament will have to decide whether to charge former leaders for failing to prevent the country's financial meltdown, after a committee of lawmakers split Saturday over whether they should be indicted, The Wall Street Journal reported. The deadlock means it will be harder for parliament to try former Prime Minister Geir Haarde and three other top officials for their role in the 2008 economic crash. Iceland was one of the first victims of the worldwide economic downturn sparked by the collapse of the U.S. subprime mortgage market in 2007.

Dubai World, the ports and real-estate conglomerate that shocked global investors late last year by delaying debt payment, said Friday it had won support from 99% of its creditors for its restructuring plan, putting a final deal for over $24.9 billion in debt one step closer, Dow Jones Daily Bankruptcy Review reported. In a statement Friday, the company and its owner, the government of Dubai, said they were pleased with the outcome.

Freshfields Bruckhaus Deringer has advised Goldman Sachs as the investment bank was today handed down a multimillion-pound fine by the Financial Services Authority (FSA), LegalWeek reported. The regulator has ordered the investment banking giant to pay £17.5m as a penalty for neglecting to inform it that its executive director Fabrice Toure was subject to a fraud investigation by US financial authorities when he became an FSA-approved person upon relocating to the UK in 2008.

Greece won’t restructure its debt and will stick to austerity measures it pledged as part of a 110 billion-euro ($140 billion) bailout, said Petros Christodoulou, head of the nation’s debt management agency. “No one is even contemplating or thinking about” debt restructuring, Christodoulou told Andrea Catherwood on Bloomberg Television’s “The Pulse” program. “The general public is very supportive of our measures.” Investors remain reluctant to buy Greek debt after the country in May turned to the European Union and International Monetary Fund for a bailout.

Texas Attorney General Greg Abbott is challenging AbitibiBowater Inc. over Chapter 11 plan provisions he says violate the Bankruptcy Code and rob taxing authorities of the rights to recoup past taxes, Dow Jones Daily Bankruptcy Review reported. In a filing with the U.S. Bankruptcy Court in Wilmington, Del., Abbott invoked a March U.S. Supreme Court ruling that he says puts the court under a duty to reject AbitibiBowater's Chapter 11 plan. The high court's decision came in a case involving student-loan debt.

The Japanese government Friday announced a Y915 billion stimulus package aimed at helping the export-driven economy deal with domestic deflation, a surging yen and a slowdown in overseas markets, Dow Jones reported. The plan, which draws on existing funding to avoid the need for yet more debt, has already been dismissed by economists as too small to have much impact given the scope of Japan's economic malaise. The wide-ranging program includes incentives and regulatory reforms to prop up employment, consumer spending and corporate investment at home.

The Incubator Bank of Japan, a small, unlisted lender that specialises in small business loans, was expected to file for bankruptcy protection on Friday, Japan's financial regulator said, Reuters reported. Depositors will be protected for up to 10 million yen ($119,200) in principal, the regulator said. The Bank of Japan said it expected no adverse impact on the country's banking system from the small lender's failure and financial markets took the news in stride.

More than 90% of Dubai World's creditors, holding around $14 billion of debt, have agreed to a lock-up deal, a person familiar with the situation said, Dow Jones Daily Bankruptcy Review reported. The lock-up agreement - preventing the creditors from selling their debt - is a step toward the restructuring of around $23.5 billion in debt under the Dubai World corporate umbrella. A consortium, comprised largely of banks, is required to sign up to the lock-up for the restructuring to go ahead.

Fiscal repair measures being implemented by heavily indebted euro zone countries are enough to prevent state insolvencies, European Central Bank Governing Council member and Bundesbank head, Axel Weber, said on Wednesday, Reuters reported. "The sum of measures initiated by governments, in cooperation with the IMF, should be enough to end discussions of a potential state insolvency in the markets," Weber said at the first day of the annual Banks in Transition conference that will attract top executives from the financial world.

The higher requirements for the capital base of banks under the so-called Basel III proposition will not affect Korean banks, a government official in charge of the issue said Wednesday, The Korea Times reported. To the envy of many European and American institutions, Korean banks need not shrink their assets or raise more capital, because they already meet those strict capital-to-asset standards, said Kim Yong-beom, director general of Seoul’s G20 committee.