Headlines

Argentina needs to be in an International Monetary Fund program to conduct talks on restructuring its debt with the Paris Club of sovereign creditors, French Economy Minister Christine Lagarde said on Sunday. Argentina owes some $6.7 billion in defaulted debt to the club. It wants to resolve the issue as part of an effort to get relations with the international community back on track after the country's 2001-2002 economic crisis. The country can either repay the debt in full, or seek a restructuring, which usually requires a country to be in an IMF program.

The World Bank group is set to launch a $5.5bn initiative to raise funds to buy distressed assets from banks in emerging and developing markets in a bid to clean up their balance sheets and free up credit flows, the Financial Times reported. The move came as the International Monetary Fund warned on Wednesday that rising losses on loans were likely to strain bank balance sheets in emerging Europe “for years to come”, saying non-performing loan ratios could peak as high as double their current level.

The U.K.'s Financial Services Authority said it will focus on the risks posed by systemically important firms and the impact of new capital and liquidity rules, The Wall Street Journal reported. The U.K. regulator said Wednesday that it will publish a paper on one of the thorniest regulatory reform issues: how to handle international banks that are deemed "too big to fail." It partly reflects pressure from the Group of 20 industrial and developing nations to apply higher regulatory standards to such firms.

One of the great legacies from the global financial crisis will be a shift in relations between those who operate in debt and equity markets. It is fair to say that when credit markets normalise, the banks will have a lot of fence-mending to do with their corporate clients, The Sydney Morning Herald reported in a commentary. The instances of banks gouging their corporate clients are now provoking plenty of chatter around corporate circles, and there are lots of executives and directors whose treatment at the hands of voracious banks will not be forgotten quickly.

One of the first fallouts, and certainly the largest, from the financial crisis in the Czech Republic came Sept. 22, 2008, when glassmaking group Bohemia Crystalex and Porcela Plus entered bankruptcy proceedings. One year later, Crystalex, one part of the group, has a new owner and - if full scale production resumes - could become the first example of an unlikely survivor of the crisis, The Prague Post reported. Crystalex's resurrection depends mostly on the company's ability to reacquire orders with customers who may now be skeptical about reinvesting in a cracked corporation.

Former Blue Chip boss Mark Bryers is now a bankrupt, The New Zealand Herald reported. By his own estimation, the founder of the failed investment scheme owes a long list of creditors $173 million. Lawyers representing eight of those creditors, collectively owed $85 million, lined up before Associate Judge David Robinson in the High Court at Auckland yesterday to hear the bankruptcy adjudication. Bryers had made an eleventh hour attempt to have the proceedings adjourned by offering a proposal for repaying his debts.

The global economy is staging so modest a recovery that additional fiscal stimulus may be needed to prevent another slump, the International Monetary Fund said. "Fiscal stimulus needs to be sustained until the recovery is on a firm footing and may need to be amplified...if downside risks to growth materialize" said the IMF in its World Economic Outlook. "Governments should thus stand ready to roll out new initiatives,” The Wall Street Journal reported. Read more. (Subscription required.)

Returns on debtor-in-possession financing have come down to around 10 to 12 percent, the top restructuring and finance executive at Barclays Plc's Barclays Capital unit said on Thursday. "There aren't as many situations where you can get a 15 percent return on a DIP the way you may have been able to get earlier this year," Mark Shapiro, head of the global restructuring and finance group at Barclays, said during the Reuters Restructuring Summit in New York. "I'd say most of the returns you are going to see are in the 10 to 12 percent range," Shapiro said.

Regions Party leader Viktor Yanukovych has criticized the government for failing to take measures to prevent the possible bankruptcy of National JSC Naftogaz Ukrainy, The Kyiv Post reported. "If a strategic enterprise like Naftogaz Ukrainy becomes bankrupt, the whole economy of the country will take a huge hit. We can't allow this to happen," he said in Chernihiv region on Friday. According to the Regions Party leader, starting with the current year the situation at Naftogaz Ukrainy has become threatening.

Japan's new bank regulator is softening its stance on a proposed moratorium on loan repayments by small business and individuals, in the latest sign that the country's new leadership is adjusting its rhetoric to the reality of government, The Wall Street Journal reported. Soon after Japan's new government was formed last month, the banking and postal-services minister, Shizuka Kamei, called for a three-year grace period on debt repayments to help small businesses and individuals cope with tough economic conditions. Bankers in Tokyo complain that Mr.