Headlines

UK banks must find as much as 29 billion pounds ($47.3 billion) of additional capital by 2011 to put against their trading books under proposals published by Britain’s financial regulator, Bloomberg reported. Today’s proposals by the Financial Services Authority to strengthen balance sheets would also limit the amount U.K. banks and building societies can lend to any single borrower, and tighten up rules on what counts as capital. The proposals come in response to changes to European Union rules covering bank capital, one of which is still being debated, the FSA said in a statement.

Barclays Capital fought back on Wednesday against claims by Lehman Brothers Holdings Inc. that it got too good a deal when it bought Lehman's core U.S. brokerage last year, Reuters reported. In court papers filed on Wednesday and earlier this week, Barclays said creditors had been made "fully aware" of how the deal was structured before it closed and that a gain Barclays recorded after the sale was not the result of "secret" negotiations to transfer undisclosed assets.

The sister of Eddy Groves, the founder of ABC Learning, has detailed in court how the company fell behind in multimillion-dollar payments to creditors and the Tax Office, The Sydney Morning Herald reported. A public examination into the company yesterday heard from Lorie Zullo, who was commercial services manager and headed the accounts payable office. She said cash was tight in the months before November last year, when the company went into voluntary administration and receivership.

Struggling Allen-Vanguard Corp., filed for protection from its creditors on Wednesday, Kelowna.com reported. The Ottawa-based company said the action will give it fresh financing to maintain operations as well as reduce a debt load that has threatened the maker of bomb-jamming gear for more than a year. The filing under the Companies' Creditors Arrangement Act also prevents creditors from suing and postpones action on a class-action lawsuit by investors that seeks $80 million in damages for allegedly misleading shareholders about the state of company finances over the last two years.

As economic indicators have improved, concern about the financial crisis has abated. But the next big problem could be approaching. Greece's public deficit is skyrocketing and the country may become insolvent. The effect on Europe's common currency could be dire, Spiegel Online reported. Greece has already accumulated a mountain of debt that will be difficult if not impossible to pay off. The government has borrowed more than 110 percent of the country's economic output over the years, and if investors lose confidence in the bonds, a meltdown could happen as early as next year.

GM will need to decide this week whether to sell its loss-making Swedish car unit Saab, daily Svenska Dagbladet quoted the Nordic government's car czar saying on Thursday. General Motors Co. said at the start of this month it would consider offers for its Saab brand until the end of the month and move to close the Swedish unit then if it appears that it cannot be sold. "They must at least have chosen one of the interested parties this week, otherwise it will be tough to complete a deal," the paper quoted Joran Hagglund, state secretary at Sweden's Enterprise Ministry, saying.

Grupo Mexico SAB de CV said on Wednesday it completed its deal to regain control of U.S. copper miner Asarco LLC, bringing to an end Asarco's four-year bankruptcy, Reuters reported. Asarco, based in Tucson, Arizona, filed for bankruptcy protection in 2005 amid a strike and more than $1 billion of asbestos and environmental claims. Last month, a U.S. federal judge approved a more than $2 billion plan by the Mexican miner to take control of Asarco. Grupo Mexico first acquired Asarco in a leveraged buyout in 1999, but lost board control of the subsidiary due to the bankruptcy.

Goldman Sachs & Co. is hampering the restructuring of CanWest Global Communications Corp., a lawyer for the troubled Canadian media company told a court on Tuesday, TheDeal.com reported. Lyndon Barnes, a partner at Osler, Hoskin & Harcourt LLP, told the Ontario Superior Court of Justice that a disagreement over the ownership of CanWest's media division that holds specialty TV assets could slow down the entire restructuring. According to a Canadian Press report, he called Goldman action a selfish move to gain an unfair advantage.

Standard Chartered Plc Finance Director Richard Meddings said he is irritated that banks owned by the U.K. government are trying to lure away his employees with the promise of better compensation, Bloomberg reported. Standard Chartered, a bank that makes most of its profit in Asia, didn’t require a bailout from the British taxpayer, unlike Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc.

British finance minister Alistair Darling set the stage for the coming election, announcing on Wednesday a one-off super tax on bank bonuses and other higher taxes on the rich, Reuters reported. His Labour Party is on course to lose an election that must take place in less than six months and desperately needs this pre-budget report to help close the opposition Conservative Party's commanding lead in opinion polls.