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Monday, 29 June 2015

BREAKINGVIEWS

A general exterior view of the U.S. Securities and Exchange Commission (SEC) headquarters in Washington, June 24, 2011.

KKR pioneers dubious sort of private equity deal

29 June 2015

The firm that helped blaze the trail on LBOs four decades ago has become one of the first to settle with the SEC over expenses charged to investors in its funds. KKR will have company, however. Individual sums may be small but, like the fees themselves, they’ll start to add up.

The sun rises behind Fiddlers Ferry coal fired power station near Liverpool, northern England, December 15 2008.

Supreme Court alters rulemaking costs and benefits

29 June 2015

U.S. justices quashed air-pollution limits whose expense seemed to far exceed their worth. Though a narrow decision, it’s a growing problem in financial regulation, too. With judicial knives out for questionable rules, agencies drafting them may have to adjust their own thinking.

Greek

Capital controls hit Greek economy at worst time

29 June 2015

Closing the stricken state’s banks would be a disaster at any time of year. But Athens’ capital controls are kicking in just as one of Greece’s main drivers – tourism – hits peak season. Even if Greeks don’t leave the euro, 2015 will be a writeoff.  

A man (L) puts money in his wallet as people line up to withdraw cash from an ATM outside a Eurobank branch in Athens, Greece June 28, 2015.

Muted markets validate EU hardball with Athens

29 June 2015

Next Sunday’s referendum could force Greece to leave the single currency. Yet bond markets are trading shy of full crisis levels. If things stay that way it eases the pressure on euro zone politicians to offer sweeter terms to the country’s leader, Alexis Tsipras. 

A Chinese national flag flutters outside the headquarters of the People's Bank of China, the Chinese central bank, in Beijing, April 3, 2014.

China's rate cut leaves central bank in a trap

29 June 2015

The People’s Bank is justified in cutting rates and giving banks extra lending power. But unfortunately the authorities look like they are trying to stop bubbly stock markets from sliding. They are damned if the easing works, and even more damned if it doesn’t.  

BIS's prudence ignores central banks' pay problem

29 June 2015

The Basel-based body wants central banks to focus more on fighting financial excesses and less on stoking demand. That’s fine, but labour’s falling share in output – and the disinflation that it helps create – present challenges that monetary authorities will have to deal with.

A protester demonstrates against the treatment of lesbian, gay, bisexual, and transgender persons by Russia, while standing outside the New York Stock Exchange November 18, 2013.

Supreme Court slices Wall Street some wedding cake

26 June 2015

The landmark ruling approving gay marriage gives even banks reason to celebrate. Benefits for same-sex spouses will be far cheaper and easier to grant, enabling stronger competition with more progressive Silicon Valley for workers. It’s a joyous union of equality and utility.

A molecular Mojito is displayed at a bartender school in Lima July 14, 2010. A Peruvian bartender school is using the principles of molecular mixology, the practical application of science and physics, to create new flavours, textures and special ways of

Puerto Rico mixes bitter sovereign-muni cocktail

29 June 2015

The U.S. territory says it can’t repay $72 bln of debt. A national borrower could try to devalue its way out of the mess. But Puerto Rico, like Greece, doesn’t have that option. A Detroit-style bankruptcy would require changes in U.S. law. It’s the worst of both worlds.

An unmanned SpaceX Falcon 9 rocket explodes after liftoff from Cape Canaveral, Florida, June 28, 2015. The rocket exploded about two minutes after liftoff on Sunday, destroying a cargo ship bound for the International Space Station, NASA said.

SpaceX flameout hardly heralds failure

29 June 2015

Space flight is like the venture capital industry in reverse: Most launches succeed, but a prominent few explode spectacularly. The formidable barriers to entry, rivals’ similar failures and SpaceX’s relatively low costs mean Elon Musk’s company remains on the right trajectory.

Deutsche Bank logo with Jain

Bafin spat suggests Deutsche reshuffle was timely

29 June 2015

The German regulator’s review of the lender’s Libor affairs has accused outgoing co-CEO Anshu Jain of lying. Jain rejects the allegation as baseless, says Deutsche. But the resulting tension would have made it difficult for him to stay on.

Vehicles drive on flyovers during the evening rush hour in central Shanghai December 29, 2010. China's auto stocks, which were bruised last week by Beijing's policy to limit new car registrations in the capital, were largely calm on Wednesday, shrugging o

China taxi apps speed towards subsidy showdown

29 June 2015

Local taxi-hailing app Didi Kuadi is raising up to $2 bln less than a month after rival Uber said it will invest $1 bln in the People’s Republic. Both are racing for market share by spending heavily on subsidies for drivers. The question is whose investors lose patience first.

Men walk by fresh anti-EU graffiti in Athens, Greece June 28, 2015.

ECB should resist giving Tsipras more ammunition

28 June 2015

Greece will shutter banks and limit withdrawals after the ECB refused to increase funding. That could help leader Alexis Tsipras convince Greeks to back euro exit in a July 5 referendum. The ECB could counter by maintaining its loans even if Greece defaults on the IMF this week.

Brazil's President Dilma Rousseff reacts during a meeting with representatives of the Black Movement at Planalto Palace in Brasilia July 19, 2013.

Brazil needs Dilma 2.0 to shine on U.S. visit

26 June 2015

President Rousseff’s statist policies helped put Brazil’s economy in the tank. Her task now is to convince U.S. investors the more market-friendly persona she has adopted since re-election is real and resilient. Robust backing for her finance minister would reassure Wall Street.

Videos

Columns

Hugo Dixon

Hugo Dixon: It's still possible to stop Grexit

29 June 2015

Athens has declared a six-day bank holiday after talks with its creditors broke down. But there are several ways Greece can still avoid quitting the euro. The most obvious is to vote in the coming referendum for the terms offered by the euro zone and International Monetary Fund.

Edward Hadas

Edward Hadas: Unforgiving pope is right on money

24 June 2015

Pope Francis says we are permanently indebted to the world in which we live. It’s different for financial promises which he says should sometimes be forgiven. In a divided world, that means the rich must help the poor find the money they need to honour their environmental debts.

Features

John Foley

Rising China: a required reading list

26 June 2015

China has towering international influence and a huge population. It will soon be the world’s largest economy too. But it’s hard to know what makes the People’s Republic tick. Enter the Breakingviews required reading list, eight works agreeably free of “dragon” in the title.

Dominic Elliott

Thiam needs $5 bln to transform Credit Suisse

26 June 2015

The Swiss bank’s weak capital position is a strategic straitjacket. For incoming boss Tidjane Thiam to be able to grow its private bank in Asia or elsewhere, a big rights issue is essential. Cutting a third of investment banking assets would ease the burden on shareholders.