(Reuters) - The London Stock Exchange (LSE.L) should consider a tie-up with Nasdaq OMX (NDAQ.O) to secure its place as a global competitor, after its failed bid for Canadian group TMX (X.TO) made it vulnerable as a takeover target, investors and market participants said. Nasdaq has been in the spotlight since the LSE pulled its $3.5 billion bid for Toronto stock exchange operator TMX, leaving the LSE without a partner at a time of frenzied takeover activity among global exchanges.

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(Reuters) - Reserve-rich Asia can afford to turn on the government spending taps should a recent bout of sluggish economic growth deteriorate into a deeper downturn. For countries counting on exports for growth -- in other words, most of Asia -- overseas demand over the next couple of months may look as shaky as it did in May and June.

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(Reuters) - China's central bank pledged on Monday to keep its "prudent" policy to wrestle inflation under control, but signaled some concerns over slowing growth by stressing policy "stability." "China's economy continues to grow at a stable and relatively fast pace, but inflation pressures remain high," the central bank said in a statement to summarize its monetary policy meeting for the second quarter. The People's Bank of China said it will use various tools to manage liquidity and keep the overall money supply at a reasonable level.

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(Reuters) - Mongolia chose U.S. miner Peabody Energy (BTU.N), a venture between China's Shenhua (1088.HK) and Japan's Mitsui & Co (8031.T), and a Russian-led consortium as preliminary winners to jointly develop the prized Tavan Tolgoi coal deposit, a senior government source said on Monday. The project, which may require initial investment of more than $7 billion, is seen as vital to kick-start the land-locked nation's economy. It will also generate billions of dollars in revenue for the companies involved and add tens of millions of tonnes of increasingly rare coking coal used by steel makers.

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(Reuters) - Bank of America Corp and JPMorgan Chase & Co have started modifying tens of thousands of mortgages where the banks deem the loans especially risky, even if the borrowers have not asked, the New York Times reported on Sunday. In some cases, the paper said, the banks are slashing the amount borrowers owe, citing one case in Florida where a woman's principal balance was cut in half.

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(Reuters) - Nearly 10 percent of European insurers would need to raise fresh capital in the event of a severe economic shock accompanied by a plunge in share prices, tumbling interest rates and a property market crash, European insurance regulator EIOPA said on Monday. Thirteen insurers would in that scenario rack up a collective 4.4 billion euro ($6.2 billion) capital shortfall relative to the minimum required under the European Union's proposed Solvency II regime, the watchdog said as it unveiled the results of a stress test aimed at gauging the sector's financial resilience.

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(Reuters) - Stocks advanced for a fifth straight session on Friday and were poised to record their best week in nearly a year after data showed the U.S. manufacturing sector grew faster than expected in June, helping to dispel some recent gloom about the economy. The pace of growth in manufacturing picked up for the first time in four months, with an index of national factory activity rising to 55.3 from 53.5 the month before, Institute for Supply Management (ISM) data showed.

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(Reuters) - The sexual assault case against former IMF chief Dominique Strauss-Kahn was close to collapse on Friday, sources close to the case said, in a dramatic turnabout that could upend French politics again. Strauss-Kahn, 62, was a steward of the world economy and a leading candidate for next year's French presidential election until he was arrested on May 14 and charged with the attempted rape and sexual abuse of a hotel maid in New York.

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(Reuters) - The pace of growth in the manufacturing sector picked up for the first time in four months in June, a sign of optimism for the sputtering economy, according to an industry report released on Friday. The Institute for Supply Management said its index of national factory activity rose to 55.3 from 53.5 the month before. The reading topped expectations for 51.8, according to a Reuters poll of economists.

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(Reuters) - Treasury Secretary Timothy Geithner is considering stepping down later this year, but will not make a decision until contentious negotiations over the U.S. debt ceiling are completed, people familiar with his thinking said on Thursday. Geithner said he would remain in his Treasury post "for the foreseeable future" and sidestepped a direct question about his career plans after a flurry of media reports that he was mulling leaving the Obama administration.

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