Headlines

Bank of Japan Governor Haruhiko Kuroda played down the risk of a crisis from the troubles in China’s real estate market that have been exposed by the downfall of developer China Evergrande Group, Bloomberg News reported. “China’s real-estate problem is somewhat different from the problem we faced” in Japan in the late 1980s and early 1990s, Kuroda said in a virtual panel discussion at a forum hosted by the European Central Bank Wednesday. “Extremely speculative investment in the real estate market does not appear to be the case in the Chinese case,” he said.

Japan’s Government Pension Investment Fund, the world’s largest pension fund, said it won’t include yuan-denominated Chinese sovereign debt in its portfolio, Bloomberg News reported. The decision comes as FTSE Russell is set to start adding Chinese debt to its benchmark global bond index, which the GPIF follows, from October. The pension fund will instead use a version of the World Government Bond Index that excludes Chinese government bonds, Hiroshi Nagaoka, an official at the pension fund, told Bloomberg News.

Insurers operating in the Irish market have paid out €130 million to date on business interruption claims stemming from the Covid-19 crisis, fuelled by a landmark court rulings and pressure from the Central Bank, according to the regulator, the Irish Times reported. The Central Bank wrote to a number of insurers in February pressing them to pay out on valid business interruption claims, following landmark court judgments in Britain and Ireland in favour of companies affected by the economic shock caused by Covid-19.

Chile's lower congressional chamber on Tuesday approved a bill that would allow citizens to make a fourth withdrawal from their pension funds, and sent it to the Senate for a vote, despite opposition from the government, Reuters reported. The initiative passed with 94 votes in favor, just one more than the minimum needed, while 39 lawmakers voted against and 9 abstained. Chile's government and the Central Bank have warned that passing the bill would negatively affect the economy, as Chileans further deplete funds meant for retirement.

Europe’s current burst of inflation is temporary and won’t lead the European Central Bank to “overreact” by withdrawing stimulus or raising interest rates, ECB President Christine Lagarde said on Tuesday, the Associated Press reported. “What we are seeing now is mostly a phase of temporary inflation linked to reopening,” Lagarde said in a speech in Frankfurt, Germany opening the ECB’s annual forum on central banking.

Italian Prime Minister Mario Draghi is following through on his view that the European Union’s fiscal rules are “obsolete” with a budget that projects deficits well above the bloc’s suspended ceiling for the foreseeable future, Bloomberg News reported. The first annual fiscal plan of his technocratic government unveiled on Wednesday shows that even though officials reckon the shortfall could drop to 2.1% by 2024, they plan to keep exceeding the 3% level that used to trigger EU admonishments before the crisis. “Our budget is fundamentally expansive,” the prime minister told reporters in Rome.

After strong observation by the National Company Law Tribunal (NCLT) and Parliamentary Standing Committee on Finance on deep haircuts in recent insolvency resolution cases and several other discrepancies on part of lenders, the Insolvency and Bankruptcy Board of India (IBBI) has approved the code of conduct for Committee of Creditors (COC)—one of the key stakeholders in the resolution ecosystem, Fortune India reported. The IBBI board, in its meeting held on last Friday, has approved the code of conduct for lenders, according to sources close to the development.

Some holders of a bond issued by a company called Jumbo Fortune Enterprises are forming a committee to press their claims in the event of a default because they maintain China Evergrande Group is a guarantor of the debt, Bloomberg News reported. The $260 million note from Jumbo Fortune Enterprises matures Oct. 3, according to data compiled by Bloomberg. The dollar note is guaranteed by China Evergrande Group and its unit Tianji Holding Ltd.

The World Bank said yesterday that East Asia and Pacific region's recovery has been undermined by the spread of the COVID-19 Delta variant, which is likely slowing economic growth and increasing inequality in the region, Reuters reported. Economic activity began to slow in the second quarter of 2021, and growth forecasts have been downgraded for most countries in the region, according to the World Bank's East Asia and Pacific Fall 2021 Economic Update.

One of the world’s largest cryptocurrency exchanges said it would close all user accounts in mainland China by the end of the year, days after the country’s central bank declared all crypto-related transactions illegal, the Wall Street Journal reported. Huobi Global, which was founded in 2013 and currently operates from offices in Singapore, South Korea, the U.S. and other countries, over the weekend said it stopped allowing new customers in mainland China to register accounts.