China has resumed work on a set of banking cyber security regulations it suspended earlier this year, reviving a potential source of friction with the US weeks before Xi Jinping makes his first trip to Washington as China’s president, sources said.

Finance chiefs from the G7 economic powers discussed ways to revive the faltering global recovery yesterday as the US leant on Europe to reach a deal to avert a Greek bankruptcy.

On one side of the Atlantic they’re trying to refill the punchbowl.

THE world economy should finally overcome its hangover from the global financial crisis this year as growth picks up and house prices rise, but reduced US monetary stimulus will pose a challenge.

Hopes are growing for a deal to head off a US government default and end a partial government shutdown after encouraging comments from the congressional leaders at the centre of the talks.

The United States moved closer to a default that could seriously harm the economy and a partial government shutdown entered its third week as Senate Democratic and Republican leaders remained at odds over spending in their last-ditch negotiations to end the crises gripping the nation.

The White House has said no decision has been made on budget provisions after discussions with senior Republicans.

Republicans in the US House of Representatives unveiled a plan yesterday that would avert a looming default, in a sign that lawmakers may end a standoff that has rattled markets and thrown the country’s future creditworthiness into question.

President Barack Obama turned up the political pressure on Republicans yesterday, saying he would be willing to negotiate on budget issues only after they agree to re-open the federal government and raise the debt limit with no conditions.

The White House has signalled that it would be open to a short-term hike in the US debt limit as the United States moved a step closer to its first-ever default while a separate impasse, a partial government shutdown, entered its second week.

The United States has moved closer to the possibility of the first-ever default on the government’s debt as Speaker John Boehner adamantly ruled out a House vote on a straightforward bill to boost the borrowing authority without concessions from President Barack Obama.

The US government may not be able to pay its bills from mid-October.

The wife of US secretary of state John Kerry is in critical but stable condition in a hospital in Massachusetts.

A US plan to force foreign banks to hold far more capital could sow discord among supervisors and lead to retaliation from abroad, EU financial services czar Michel Barnier said last night.

Prominent Washington journalist Bob Woodward said a senior White House official threatened him he would “regret” publishing a story challenging the White House’s account of how the idea for automatic spending cuts originated.

President Barack Obama has named long-time foreign policy aide Denis McDonough as his next White House chief of staff.

US president Barack Obama will make his first comments on the economy and the financial crisis today as the White House makes the issue its top post-election priority.

WHITE House budget director Jack Lew said yesterday there was still time to clinch a major deficit reduction deal and he was confident that congressional leaders know a US debt default is not an option.

PRESIDENT Barack Obama’s proposed budget for fiscal 2012 will seek to cut the record federal deficit by $1.1 trillion over the next 10 years, White House budget director Jack Lew said last night.