PRESS DIGEST - New York Times business news - June 18

June 18 (Reuters) - The following were the top stories in the New York Times business pages on Wednesday. Reuters has not verified these stories and does not vouch for their accuracy.

* Credit default swaps are taking center stage in another Wall Street drama: whether regulators will let MBIA Inc (MBI.N: Quote, Profile, Research), the big bond insurance company, renege on a promise to shore up a crucial unit with $900 million in capital.

* Responding to reports that some lenders have stopped offering federal loans at community and other colleges, two Democratic senators introduced legislation Tuesday to prohibit lenders from picking and choosing among institutions.

* Inflation in Britain accelerated to the highest level in more than 10 years in May, further tying the hands of policy makers grappling with a slowing economy.

* Bush administration economic officials, frustrated over the pace of change in China, warned Chinese leaders Tuesday not to let American regulatory failures in the subprime mortgage crisis become an excuse for not deregulating Chinese markets and opening them to foreign investment.

* Northwest Airlines Corp (NWA.N: Quote, Profile, Research) said Tuesday that it planned to eliminate more planes from its fleet, including Boeing, Airbus and McDonnell Douglas jets, by the end of December, its second cut in capacity this year.

* The American Red Cross and Johnson & Johnson (JNJ.N: Quote, Profile, Research), the health care conglomerate, announced Tuesday that they had settled a longstanding dispute over use of the Red Cross trademark.