Journalists
Hugo Dixon founded Breakingviews in 1999. He is editor-in-chief and chairman. Before founding Breakingviews, Hugo spent 13 years at the Financial Times, the last five as head of Lex. He began his journalistic career at the Economist. Hugo was a Brackenbury Scholar at Balliol College, Oxford, where he gained a first class degree in Politics, Philosophy and Economics. Before that, he was a King’s Scholar at Eton College. He is the author of the Penguin Guide to Finance and Finance Just in Time. He was named Business Journalist of the Year 2000 in the British Press Awards. In 2008, he won the Decade of Excellence Award at the Business Journalist of the Year Awards. He is a visiting fellow at Oxford University’s Centre for Corporate Reputation.
The PIGS (Portugal, Italy, Greece and Spain) are old hat. The new acronym for dominoes if Greece should fall is STUPID (Spain, Turkey, UK, Portugal, Italy, Dubai). Given the way such acronyms can become contagious, the UK needs to distance itself from the others. Here's how.
The Tory leader now says extensive cuts may not be needed immediately if he wins the coming UK election. That may reduce the risk of a double-dip recession. But quick decisions will still be needed even if savings don't come overnight. Otherwise, the UK could end up like Greece.
After Kraft's takeover of Cadbury, nervous Brits are casting around for ways to stop other icons falling into foreign hands. Most of the ideas aren't good. But one proposal -- abolishing the tax-deductibility of interest -- has merit, albeit not for protectionist reasons.
Whatever the precise details of the president's proposed new crackdown on big banks and their proprietary trading, it doesn't look pretty for Wall Street. Even if there are no forced break-ups, a return of the spirit of Glass-Steagall could curb business practices and profits.
The U.S. levy on bank liabilities is quite a good tax, which could encourage more sensible behaviour and raise badly-needed cash. But to make it really good, and fly internationally - as Sweden is now advocating - it needs to be rejigged.
The Obama administration is thinking of taxing banks according to the size of their liabilities. Crafted in the right way, this could be a useful way of recouping bailout costs while also giving banks an incentive to behave more sensibly. But there are pitfalls.
The UK government has made a mistake in suggesting its bankers' bonus tax might be extended. One way of mitigating the damage would be to make clear that any repeat would cover total compensation, not just bonuses. Otherwise, banks will just jack up base salaries even more.
The industry has lost credibility because of its crass bonus behaviour in 2009. To get back on the front foot, compensation this year needs to be much lower. Governments and regulators should make this happen -- and do so quickly. Delay will just store up trouble for everybody.
The French president used his address in Davos to blast the untrammelled free market. While the economic crisis has certainly exposed deficiencies in financial capitalism, this is largely because market forces were too weak rather than too strong.
The U.S. president's planned overhaul of Wall Street does not address the fundamental failings of the financial system. This requires regulators to come up with a consistent set of global rules. By going it alone, the U.S. has reduced their chances of success.
The U.S. levy on bank liabilities is quite a good tax, which could encourage more sensible behaviour and raise badly-needed cash. But to make it really good, and fly internationally - as Sweden is now advocating - it needs to be rejigged.
The Obama administration's apparent decision to exempt deposits from the new tax will hit the likes of Goldman much harder than commercial banks. This isn't just politically astute. It also makes economic sense to make hot money a more expensive source of funding.
The ex-TW boss says his merger with AOL was the worst deal of the century. But what about France Telecom/Orange, Deutsche Telekom/Voicestream or Vivendi/Seagram -- other TMT deals that nearly bankrupted the buyers? And, outside TMT, what about ABN AMRO's carve-up?
The UK's planned one-off tax on bonuses may well damage the City. But this year's profits are clearly a windfall, earned on the back of a massive bailout. The industry's failure to restrain pay is so socially insensitive that it has only itself to blame for the assault.