A safe-haven currency can invite economic trouble. The Swiss central bank is up to the challenge. It started with market intervention and has now introduced a negative overnight rate. The Swiss realise that money is more of a policy tool than a store of value.
The ECB wants to follow its stress test with further harmonisation of European lenders. But as the central bank toys with QE, financial stability may take a back seat. The reform agenda of supervisory chair Danièle Nouy will have to accommodate fears for the area’s growth.
The U.S. cosmetics company’s Chinese subsidiary gave officials handbags, holidays and cash to access a huge market. The rationale: muddy markets make dirty hands. Avon has learned its lesson with a $135 mln fine. Elsewhere in China, the belief that bribery pays remains engrained.
The U.S. central bank now puts “patience” above needing “considerable time” for changing monetary policy. It suggests Chair Janet Yellen is focusing more on data than anything else. That could stoke interpretive disagreements on the committee – but also spark unexpected hikes.
Martin Sorrell says the ad group’s Chairman-designate Roberto Quarta will help its “horizontality.” The word also sums up the partnership aspect of good CEO-chair relations. But given the WPP CEO’s run-ins with investors, Quarta will want to be a degree higher, not on a level.
The country’s constitutional court has shot down the privileges benefitting the heirs of family firms. Bigger companies face a higher burden, but they can cope. The tax code will be fairer and fiscal revenue could be higher – all without harming Germany’s economic backbone.
The Chinese web giant is already behind rivals Alibaba and Tencent in mobile taxi-apps. Strategically the tie-up looks like a coup. But without financial terms, investors are left in the dark. Uber’s controversial track record and Baidu’s shrinking margins add to the uncertainty.
Assume the economy expands as briskly in the next 20 years as in the past decade. Its share of world GDP could top 35 percent, a Breakingviews calculator shows. A static workforce would have achieved heroic productivity gains. If it doesn’t, China’s slowdown has only just begun.
President Obama intends to relax the U.S. embargo on Cuba. The egregious restrictions failed in their intent, won little support abroad and served only domestic political purposes. Removing trade barriers will bring a mini economic windfall and, ultimately perhaps, freedom.
New rules and bank scandals boost financial fraud and class-action filings in Britain. Patent combatants flock to German judges. And spats over failed investments clog EU courts. The upshot: a lawsuit boom that may topple America as the world’s business litigation capital.
Anti-takeover protections adopted before threats arise are more apt to weather legal scrutiny. It’s one reason Allergan was able to resist Valeant’s $52 bln bid. When triggered reactively, they’re considered unfair surprises. Either way, shareholders often get unneeded cover.
With the Russian banking system hobbled by sanctions, Raiffeisen, UniCredit and SocGen are well placed to grab market share in commercial lending. The vital factor will be how insulated they are against the current turmoil. Some look better placed to tough it out than others.
The list of global banks deemed systemically important has hardly changed since 2011. But membership now comes with ever-larger capital requirements and increased regulatory meddling. In an attempt to escape, some lenders will decide to become smaller or less interconnected.