Headlines

China broadened the base of reserves it requires commercial lenders to deposit with the central bank to control liquidity and limit inflation, economists said, Bloomberg reported. Reserve requirements are being extended to customers’ margin deposits, a move that may drain 900 billion yuan ($140 billion) from the banking system over six months, Bank of America Merrill Lynch economist Lu Ting said in an e-mailed note on Aug. 26. Mizuho Securities Asia Ltd. cited similar information.

Troubled Wellington property developer Terry Serepisos has been given a bit more time to convince creditors he can orchestrate an orderly sale of his assets with a surplus of some $30 million, The New Zealand Herald reported. Associate Judge David Gendall granted an adjournment for bankruptcy proceedings against Serepisos in the High Court in Wellington today after receiving a proposal on Friday that will leave assets worth some $232.5 million in the hands of two experienced insolvency practitioners to sell them over the next few years.

European banks have become nervous about each other’s creditworthiness, evoking memories of the mistrust that prevailed during the dark days of 2008, the International Herald Tribune reported. European institutions are better armored for a crisis than they were in 2008, analysts say. But some still have doubts whether that armor is thick enough to withstand another big shock. Despite progress in rehabilitating the financial system since then, analysts say, some gaps remain, among them the continued lack of any mechanism to deal with the failure of a large bank.

China's big banks reported hefty profits in the first half of this year, but signs of strain are showing from their massive lending binges and as they struggle to meet tougher capital requirements, The Wall Street Journal reported. Profits of the nation's five biggest banks by assets, led by Industrial & Commercial Bank of China Ltd., were buoyed in part by a greater focus on business that generates fee income, such as credit cards and wealth-management products.

German landesbanks WestLB and LBBW said their first-half earnings were weighed down by Greece exposure and restructuring, factors that made it difficult for either public sector lender to give a clear forecast for 2011, Reuters reported. WestLB said ongoing restructuring expenses weighed down first-half earnings as the troubled German bank prepares to break itself up. The lender posted a net profit of 36 million euros ($52 million) in the January to June period, down by half from 67 million in the year-earlier period as it transferred portfolios to the German government's bad bank.

The Danish government Thursday said that a political deal has been reached on new measures to support consolidation in the country's fragmented banking industry, passing into law a range of planned reforms proposed earlier August by Economic and Business Affairs Minister Brian Mikkelsen, Dow Jones reported. The reforms, which add to Denmark's earlier Bank Package 3 regulatory framework, aim first and foremost to pre-empt bank collapses by facilitating takeovers of troubled lenders, the minister said in a statement.

The Queensland Government says there was nothing it could do to prevent one of the biggest tourism developments at Airlie Beach, in the Whitsundays region of the state's north, from going into receivership, ABC News reported. Administrators took control of the $200 million Meridien Marinas Port of Airlie project earlier this week. The development includes 56 apartments, 15 beachfront land lots, marina berths and a retail and dining precinct.

Financial authorities have vowed to throw everything they have at the country’s consumer debt mountain, which now threatens to outstrip an entire year’s gross domestic product (GDP). But to the majority of observers, it appears the officials are doing nothing at all, if not actually making things worse, The Korea Times reported. It was two months ago when the Financial Services Commission (FSC) announced a fresh set of measures to tackle the increasing problem of personal indebtedness, aimed at assisting households in repaying loans and suppressing irresponsible lending by banks.

Korea’s increasingly toxic housing market is now threatening to wipe out the cream of the crop in its construction industry, a private think-tank claims. High on the endangered list are builders like Daewoo, Lotte, Ssangyong, Halla, Kolon and Keangnam, The Korea Times reported.

Bank of Ireland said Wednesday it would impose a 60 per cent haircut on a group of UK junior bond investors through a revised debt buyback offer, the Irish Times reported. In July the bank withdrew its original offer to swap £75 million (€85.3 million) in perpetual unsecured junior bonds for cash or equities, citing administrative difficulties. The decision to terminate the offer came as the lender faced a legal action by a British investor in the bonds which were originally sold by Bristol and West Building Society, which Bank of Ireland acquired in 1997.