The UK government will not underwrite Lloyds Banking Group's planned rights issue, potentially complicating the bank's push to raise enough capital to avoid the controversial asset insurance programme. The government, which owns 43.5% of Lloyds, is expected to participate in the planned rights issue but officials insist that Alistair Darling, chancellor, has not yet decided formally. However, they said, the government would definitely not underwrite Lloyds' cash call, says the FT.Northern Rock, Britain's state-owned mortgage bank, yesterday paved the way for a pre-election sell-off, informing people with risky mortgages that they would become customers of a "bad bank", to be called Northern Rock Asset Management, according to the Independent.Willie Walsh, the British Airways chief executive, has taken his campaign for a tie-up with American Airlines to Washington - a day after two influential senators demanded closer scrutiny of the deal, writes the Telegraph.Bruce Wasserstein, the head of the Lazard investment bank and "the father of modern M&A", died on Wednesday after a career that put him at the centre of global dealmaking from the go-go days of the 1980s to the current Kraft bid for Cadbury, reports the FT.A damning report by the European Commission on the long-term prospects for Britain's public finances warns that Britain is at "high risk" of running unsustainable debts - implying that the nation will be unable to service its debts and that only default or high inflation can relieve the burden, according to the Independent.Goldman Sachs is on Thursday set to further ignite the debate over bankers' pay when it reveals it is on track to deliver record-breaking bonuses in excess of $22bn (£13.7bn) this year thanks to strong profits, says the Telegraph.City minister Lord Myners yesterday said he had sealed a deal with the biggest foreign banks operating in the City of London to show pay restraint, writes the Independent.City regulators have dramatically stepped up the number of people they veto for senior City jobs and yesterday rebuked banks for putting up unsuitable candidates. Eighteen out of 172 candidates for City directorships and other senior bank jobs have been rejected in the past year by the Financial Services Authority, it said yesterday, according to the Times.House prices have recovered this year and housebuilders have raised £1.7bn of new equity to shore up their balance sheets, but Fitch, the credit rating agency, believes this threatens to be a "false dawn" which masks "potentially serious problems", reports the Telegraph.Sweden's biggest energy company is eyeing a possible multibillion-pound investment in Britain's nuclear power industry, The Times has learnt. Vattenfall, Europe's fifth-largest electricity utility, is considering acquiring a stake in EDF's project to construct four new reactors in the UK at Hinkley Point in Somerset and Sizewell in Suffolk.