Sherwood exit highlights wider Goldman transition 21 Nov 2016 The investment bank’s European co-head Michael Sherwood is retiring. A brush with bust retailer BHS, while maybe not the reason, could have hindered a possible step up to CEO. In any case, Europe and fixed income, his other area of expertise, face uncertain futures.
Credit markets ill-prepared for Trump presidency 21 Nov 2016 The U.S. president-elect may boost spending and growth. But higher interest rates would also push up funding costs for companies and emerging economies. Though credit investors have largely shrugged off Trump’s victory, the end of loose monetary policy could prove a shock.
U.S. banks less worried by too-big-to-fail stigma 21 Nov 2016 Regulators' annual ranking of systemic lenders shows Citi, Bank of America and Wells Fargo have become riskier, while the likes of HSBC and Barclays have pulled in their horns. The shift implies American stress tests are a bigger constraint on capital ratios than global lists.
Britain’s brave new world hits post-Brexit reality 21 Nov 2016 Prime Minister Theresa May wants capitalism to work for the little guy. But in a speech to UK business she softened ideas like putting workers on boards, while promising low corporate taxes. Pressure to rein in the deficit and migration leaves less room for policy innovation.
French far right can make hay if Fillon shines 21 Nov 2016 Unabashed economic reformer Francois Fillon has a good chance of becoming the opposition centre-right's presidential candidate. His proposals risk alienating swathes of voters and give far-right leader Marine Le Pen a better chance of capitalising on her statist manifesto.
Merkel can win new term, but won’t finish it 20 Nov 2016 The German chancellor's decision to run for re-election in 2017 is a gesture of much-needed stability. Angela Merkel is likely to win despite the rise of the right-wing AfD party. After that, her best bet is to quit while she is ahead.
Review: A prophet for the age of endarkenment 18 Nov 2016 John Gray foresaw the Trump era. "Enlightenment's Wake", published in 1995, predicted that grand ideas would be replaced by ethnic and religious conflict, authoritarian regimes and great power rivalries. Still, the newly-relevant book offers some hope for despairing liberals.
Tesco returns to neglected retail basics 18 Nov 2016 The UK supermarket will plough most of its planned cost savings into shielding consumers from inflation, effectively continuing a price war. Yet Tesco also says it can double its operating margin. That hinges in part on a tricky strategy: persuading shoppers to buy pricier goods.
Deutsche bonus clawback can work even if it fails 18 Nov 2016 The struggling German bank wants to cancel former executives' unvested and previously suspended compensation awards. Deutsche Bank won't retrieve enough to boost capital meaningfully. But reassuring shareholders whose rewards have never matched employees' is still worthwhile.
UK watchdog turns screw on besieged fund managers 18 Nov 2016 The Financial Conduct Authority has criticised weak competition among asset managers. Proposed remedies including better transparency and governance could squeeze earnings and pay. It’s a knock the industry, under pressure from passive investments, didn’t want but probably needs.
VW finally makes it to third gear 18 Nov 2016 The German carmaker has convinced unions to let it shed 30,000 jobs. That's a second big step, after settling a big emissions cheating case. Next comes the shift to electric and self-driving cars, and beating an overly modest 4 pct operating margin target for its flagship brand.
Mediobanca ploughs lonely but fertile furrow 17 Nov 2016 The one-time puppeteer of corporate Italy wants to bulk up in wealth and asset management. Mediobanca is thriving, but it is also small. If boss Alberto Nagel’s latest strategy works then its potential endgame - to sell out to a bigger player - will get easier.
Rio Tinto takes bitter but helpful graft medicine 17 Nov 2016 The Anglo-Australian mining giant sacked two senior employees amid a probe into payments made in Guinea. High corporate ethics are admirable but hard to apply in frontier markets. Yet turning a blind eye to corruption benefits neither resource owners nor investors.
Zurich Insurance overhaul short on big thinking 17 Nov 2016 It's good that the Swiss insurer plans to increase cost-cutting and link dividend payouts to earnings. While the emphasis on capital discipline is laudable, boss Mario Greco has yet to show the kind of strategic revamp investors might have hoped for.
Santander yanks good return from imploded deal 17 Nov 2016 By taking control of its asset management unit, and selling its Allfunds platform, the Spanish bank thinks it can make a return on investment of over 20 percent. There may be execution risk, but given the division never lived up to Santander's grand plans, it's a good outcome.
Europe’s anti-austerity swerve faces uphill climb 17 Nov 2016 The European Commission wants euro zone countries to boost spending by 0.5 pct of GDP next year. It's a belated attempt to head off a Trump-style populist revolt. To make a difference, however, wealthy countries like Germany would have to help struggling ones like Italy.
Shadow banking risk is now hiding in plain sight 16 Nov 2016 Complex forms of credit that helped trigger the crisis have mostly shrunk in recent years. Most lending has come from more transparent sources like the bond market. Even so, any system that depends on private investors remains vulnerable to a sudden loss of confidence.
Fintech disruption hits a natural ceiling 16 Nov 2016 UK peer-to-peer lender Zopa has applied for a bank licence. In one sense it’s a bet that a digitised banking model can eat established peers’ lunch. In another it’s a recognition that disruption via peer-to-peer can only go so far given banks are also upping their game.
Amazon lends Morrisons scale, at a price 16 Nov 2016 The UK supermarket is extending its tie-up with Amazon, boosting its online sales. The deal isn't without risk for the grocer: Amazon is much bigger than it, and will have discretion over pricing. That's the price Morrisons pays for being slower than rivals to move online.
Rolls-Royce recovery mired in accounting fog 16 Nov 2016 Under new accounting rules, the engine-maker's operating profit in 2015 would have been less than half the reported figure. Cashflows are unaffected, but are nothing to write home about. Boss Warren East says performance is improving. Investors can only take his word for it.