Hugo Dixon: Mario Draghi is having a good war 20 Jul 2015 The ECB president has done almost everything he can to keep Greece in the euro without breaking the central bank’s rules. Although Draghi has been attacked by Athens for asphyxiating the country and hardliners for showing excessive leniency, he has got the balance about right.
UK seeks watchdog: must be tactful, tough and able 17 Jul 2015 Britain is searching for a new regulator after Chancellor George Osborne ousted Financial Conduct Authority boss Martin Wheatley. His replacement will need to avoid mistakes and forge a conciliatory pact with financial institutions while also protecting consumers. It’s a big ask.
Review: A virtuous defence of finance 17 Jul 2015 Markets are more ethical than confrontational, writes Pierre de Lauzun. The French banker even praises his industry for tying present to future and supporting the common good. He’s onto something. Finance can be socially helpful, if it shakes off so-called economic rationality.
Bafin barbs show scale of Deutsche overhaul task 17 Jul 2015 A leaked letter from the German bank’s lead regulator slams executives for incompetence - or worse - over Libor. New CEO John Cryan needs to repair relations. Improving controls and recruiting new managers complicate the already-sizeable job of boosting Deutsche’s performance.
German labour costs rise at just the right pace 17 Jul 2015 A new minimum wage, an increasing shortage of skilled workers and palpable pay hikes are pushing German wage costs upward. But the trend is gentle enough for the labour market to cope while exporters’ excessive competitiveness is eroded safely. The whole euro zone benefits.
The dubious maths behind UK non-dom tax clampdown 17 Jul 2015 Britain reckons it can raise 1.5 billion pounds by limiting a loophole that allows wealthy residents to avoid tax on overseas income. The country’s budget watchdog is sceptical. Regardless of the merits of changing an archaic system, it’s just as likely to lose as make money.
Rob Cox: The world’s hardest central bank job 16 Jul 2015 It’s not Yellen’s, Draghi’s or Kuroda’s. Russian central bank chief Elvira Nabiullina faces a unique bouquet of challenges. On top of a weak oil price and ruble, nettlesome inflation and Western sanctions, there’s Vladimir Putin. Under the circumstances, she deserves a medal.
Greek anger reflects fall, not level, of income 16 Jul 2015 The bailout plan was approved, with bitterness all round. Economist Branko Milanovic’s comparison with Portugal helps explain the ire. The average Greek has consumed more over the last 20 years, but now has less. The political effect of the drop is much worse than the economics.
UK’s BT can gain from more open future 16 Jul 2015 Britain’s telecoms giant has invested an impressive 10 bln stg in national fibre-optic broadband over the last decade. But times have changed. Ofcom’s regulatory review is a good time for a rethink. A division might now allow capital to be raised and deployed more efficiently.
Santander puts JPMorgan stamp on U.S. business 15 Jul 2015 Blythe Masters’ appointment as chair of the Spanish bank’s auto lender leaves the Wall Street bank’s alumni in four of the top roles in its U.S. units. Masters isn’t an obvious choice. But the hire shows group CEO Ana Botin, also ex-JPMorgan, is serious about fixing the business.
Schaeuble looks immune to Varoufakis-style exit 15 Jul 2015 Like his former Greek colleague, Germany’s finance minister has become a liability. After openly calling for Grexit and then questioning an agreed deal, he is not the man to lead future negotiations. The catch is German political realities mean Angela Merkel needs him.
Greek exit talk leaves euro investors unperturbed 15 Jul 2015 A taboo was broken when Germany suggested Athens could leave the European monetary union, albeit temporarily. In theory, if one country can exit, so can another. But markets aren’t pricing in any redenomination risk. Greece is being treated as an exception, not a precedent.
Edward Hadas: Greece, China and financial failure 15 Jul 2015 Not noticing how loans were distorting the Greek economy led to a crisis. In China, the financial system’s ability to create illusory wealth is causing bother. The authorities are lost everywhere. They would do better if they treated finance as an unruly servant of the economy.
IMF gives Greek debt relief a helpful shove 15 Jul 2015 The International Monetary Fund’s conclusion that Greece’s debt is less sustainable than it was is a statement of the obvious. It’s unlikely to prevent Angela Merkel from winning approval for the country’s latest bailout. But Germany will eventually have to accept the hard truth.
Hugo Dixon: Greek PM shouldn’t waste crisis 15 Jul 2015 Now that Alexis Tsipras’ Syriza party is splitting, he can form a credible and stable new government. That could put relations with Greece’s creditors onto a constructive footing and turn the economy around. If Tsipras squanders the chance, the country will be doomed to failure.
Fund managers beat banks in anti-regulation tussle 15 Jul 2015 Regulators look unlikely to slap a too-big-to-fail tag on the world’s biggest asset gatherers. That’s a lobbying victory for the likes of BlackRock, but it’s also the right call. Systemic risk stems from leverage and maturity transformation. Fixating on size is a distraction.
Germany’s Greek bullying can be a one-off 14 Jul 2015 The Athens diktat is a risky deviation from German self-constraint in Europe, and would be toxic if it became a new leitmotif. But Berlin’s brute force method was provoked by a misguided Greek strategy that hit trust. German over-assertiveness can remain the exception.
Iran nuclear deal is huge potential step forward 14 Jul 2015 The hope is that the 100-page agreement will help keep oil cheap, spur rapid growth in the Iranian economy and lead to less fighting in the Middle East. But sanctions can be revived quickly if things don’t go to plan. Mistrust remains endemic. Optimists will have to be patient.
Hugo Dixon: Euro zone should take over Greek banks 14 Jul 2015 Instead of lending money to Athens so it can recapitalise its stricken banks, the creditors should pump money directly into the lenders themselves. This will help sever the doom loop between the Greek state and its banks. It will also make Greece’s debt more sustainable.
Greece sends periphery bank bulls to the abattoir 14 Jul 2015 The 25 billion euro support programme for the stricken state’s banking sector means private-sector investors who bet big in recent years face losses. Canada’s Fairfax and Wilbur Ross are among them. It rather takes the shine off major gains made in other periphery euro states.