Thruppence: Sympathy for the devil in boardrooms 10 Jul 2015 Appointing a “contrarian director” to challenge management recommendations was the winning suggestion from an MBA student in a competition sponsored by Cambridge and McKinsey. Even some Breakingviews columnists who reject the proposal would like to see more devil’s advocacy.
Review: Dealmaking when lives are at stake 10 Jul 2015 Financiers like to compare their negotiations to military strategy. Yet the art of the deal matters far more when those talking also kill. Jonathan Powell’s “Terrorists at the Table” is a primer like few others, by a worldly ex-diplomat of stubborn hope. It’s also darkly funny.
Tsipras U-turn only lowers short-term Grexit risks 10 Jul 2015 Greece’s latest bailout plan accepts most of what its July 5 referendum rejected. Creditors will have to actively want a Greek exit from the single currency for it to happen now. Yet fresh austerity, capital controls and Athens’ weak reform record mean the truce may not last.
Spain picks smart route out of housing mess 10 Jul 2015 Madrid and Barcelona’s new left-wing mayors might have taken a more draconian approach to blocking evictions. Instead of interventionism, they have opted for improving support for those on the receiving end. With luck, Spanish bad debt investors won’t be the only beneficiaries.
Wreckage of failed German lender HRE offers value 10 Jul 2015 In the midst of the Greek crisis, Germany’s government is pursuing a 1.5 bln euro IPO of Deutsche Pfandbriefbank, a remnant of Hypo Real Estate, which collapsed in 2009. While still hobbled by the past, the lender is recovering. A knockdown price takes legacy issues into account.
Greek exit costs are more bearable than they look 9 Jul 2015 Euro zone governments are on the hook for losses worth hundreds of billions of euros if Greece leaves. But these losses can be held off-balance sheet, fiddled away by statistics or spread over decades. That may be why EU negotiators are becoming less guarded about the risks.
Rob Cox: The (bank) resolution will be televised 9 Jul 2015 Global regulators have made great progress preparing for the technical aspects of a collapse, and resurrection, of a major financial institution. What they need to spend more time on is ensuring they can effectively communicate the process to a world consumed by financial panic.
Barclays investment bank is hardest to turn round 9 Jul 2015 The UK lender, Credit Suisse and Deutsche Bank have all changed chief executives this July. Each has a distinct investment banking challenge. The Swiss bank is capital-light, Deutsche needs to cut costs. Yet Barclays’ shrinking top line suggests its revamp will be the toughest.
Guest view: Beware capital markets union hype 9 Jul 2015 The drive to improve European borrowers’ access to share and bond finance is worthwhile, says José María Roldán. But it can only fund half the economy at most. Making post-2008 bank reforms fit for purpose should be as big a goal.
Hugo Dixon: Tsipras has to break party or country 8 Jul 2015 The Greek prime minister’s victory in Sunday’s catastrophically timed referendum has reduced Greece to a meek supplicant suing for peace. Alexis Tspiras now has to choose between splitting his Syriza political party or taking his nation into an economic abyss.
UK Tories pinch some choice left-of-centre ideas 8 Jul 2015 Britain’s budget saw hikes to the minimum wage, a slowing of austerity, and hits for banks and non-doms. That isn’t the usual domain of British Conservatives. Yet deep welfare cuts, higher inheritance tax thresholds, and falls in business tax show the clothes-stealing has limits.
Barclays CEO vacancy will be a headache to fill 8 Jul 2015 Antony Jenkins has paid the price for weak investment bank returns and tactical missteps. Chairman John McFarlane can hold the fort. But a permanent replacement has to inspire a wary workforce and pull off a tricky revamp – just as UK ring-fencing rules make it all much harder.
Lloyds may be the victim of UK bank levy rejig 8 Jul 2015 The 2.5 bln pounds the bank tax raises from domestic players would suffer if HSBC relocates its head office. Chancellor George Osborne may use the upcoming budget to put the levy on a more stable footing. The least-bad option could be to shift the burden to UK-dependent Lloyds.
Agnellis jump through hoops to woo PartnerRe 7 Jul 2015 Family scion John Elkann is offering his quarry’s preferred shareholders a higher dividend and a pledge to restrict payouts to his own Exor. That should curb fears of Fiat or other group holdings hurting reinsurer PartnerRe’s credit – if investors take Elkann’s word as his bond.
Governance complicates $16 bln German media merger 7 Jul 2015 Publisher Axel Springer is in early merger talks with larger broadcaster ProSiebenSat.1. Antitrust hurdles are lower than when they last tried to combine, while synergies could be hefty. But a deal will be a challenge as long as the Springer family insists on keeping control.
Santander U.S. lobs spanner in gears of turnaround 7 Jul 2015 Shares in the Spanish bank’s American auto lender slumped 8 pct after a surprise CEO change before the July 4 weekend. Departing boss Thomas Dundon also bagged a whopping $1 bln exit deal. Such abrupt execution shows Santander’s U.S. operations do not yet have their act together.
Latest pharma roll-up leaves lots of room to grow 7 Jul 2015 Horizon’s $1.75 bln unsolicited offer for U.S. rival Depomed continues the sector’s M&A rave fueled by tax savings and cost cuts. The Irish bidder is a recent entrant on the scene, so its low debt load and small size means it can easily expand. That portends more deals ahead.
Heta deal puts EU bank bail-ins back on track 7 Jul 2015 Austria has offered 1.2 bln euros to Bavaria to compensate for state bank BayernLB’s investment in the remains of Hypo Alpe Adria. Given Heta is a test case for rescuing banks without taxpayer cash, that’s just as well. It implies not all bail-ins need to end in court.
ECB’s Greek bank haircut leaves room for deal 7 Jul 2015 The euro zone central bank has forced Greek lenders to put up more collateral to access emergency loans. That reflects the increased risks of Greece leaving the single currency. But the move looks calibrated to keep the banks afloat while the country seeks a last-ditch rescue.
Greece more likely to hurt than help Podemos 7 Jul 2015 The future of Spain’s radical newcomer party is inevitably tied to its Greek peer Syriza. Podemos will get a boost if the Greeks are able to negotiate a better deal with creditors. More likely, a period of prolonged chaos will hurt support for Podemos in the upcoming general election.