Lloyds legal fail takes gloss off 2009 Houdini act 3 Jun 2015 A UK court says the bank can’t redeem 4 bln pounds of CoCo bonds that helped it evade an even bigger crisis-era bailout. Without them, Lloyds would be much further off escaping its state shareholding. But it’s still left paying 200 mln pounds a year for near-useless capital.
Edward Hadas: FIFA and the root of all evil 3 Jun 2015 The soccer federation’s corruption shows how much harm abundant money can do to weak institutions. The problem goes well beyond sport. Modern affluence spreads lucre’s poison to everything from drug crime to the perfectly legal but socially destructive spiral of executive pay.
Elite FX club is better with China in than out 3 Jun 2015 Adding the yuan to the IMF’s reserve currency basket this year would be an easy win. It’s a big symbol for China but costs little for other constituents. Moreover, officially designating China as a lynchpin of the world’s financial system may convince it to act the part.
Bundesbank squeezed by euro’s design flaws 3 Jun 2015 The ECB’s quantitative easing rules reflect the incomplete unity of the single currency. They’re forcing the German central bank to buy more of its government’s bonds than the market can easily provide. In May, the mix of maturities purchased probably added unwanted volatility.
Chinese insurer’s ascent raises known unknowns 3 Jun 2015 Anbang Insurance is vying to add Portugal’s Novo Banco to trophies including New York’s Waldorf Astoria. The group’s prodigious expansion raises questions about its backers and the health of China’s financial system. Whether its targets’ regulators are up to the task is unclear.
Match-fit FIFA would give players, fans more ball 2 Jun 2015 Sepp Blatter has resigned as the besmirched president of soccer’s governing body. Needed reform is now unavoidable. FIFA’s best strategy would be to embrace it by enfranchising the beneficial owners of the sport: the players and the fans. It would also usher in better governance.
Rob Cox: If FIFA were a country it would be Russia 2 Jun 2015 The soccer federation run by Sepp Blatter and the Russian one headed by Vladimir Putin operate as baroque patronage systems, their bosses doling out favors from the center. Power derives from keeping constituents both fragmented and well heeled.
Euro zone prices give Draghi reason to crow 2 Jun 2015 Prices in the single currency zone are rising a tiny bit. That is welcome news for European Central Bank President Mario Draghi even if he doesn’t deserve much credit, and even though producer prices are still very weak. But the ECB’s fight against disinflation isn’t done yet.
PartnerRe debt quirks may hinder Agnelli advances 2 Jun 2015 A deal by the Italians’ Exor vehicle could blow up the reinsurer’s credit ratings, the target claims. That’s debatable, but Bermudan law and other technicalities make PartnerRe’s preferred shareholders a key voting constituency. Some may find downgrade fears hard to ignore.
Immigration is crucial to euro zone’s fortunes 2 Jun 2015 The flow of people into the single currency area could account for most of the region’s GDP growth over the next few years. Migration magnifies trends. The slower flow of new workers made the recession worse. A speed-up could turn a tepid recovery into a surprisingly strong one.
Why the oil price will fall again 1 Jun 2015 Most industry observers expect a slow climb from the current levels. But global supply is rising, as U.S. shale drillers cut costs fast and Saudi Arabia and others go for volume. With non-U.S. shale on the horizon, $65 a barrel for Brent looks more like a ceiling than a floor.
Playtech could find trading tougher than gaming 1 Jun 2015 Israeli billionaire Teddy Sagi’s company has bid $700 mln for Plus500, the trading platform hit by a watchdog-mandated freeze on accounts. Playtech could flog online smarts to retail brokers - as it has in the gaming sector. But there may be fewer big players in need of advice.
Hugo Dixon: Greek ultimatum is a bad idea 1 Jun 2015 Some say the euro zone and IMF should present Greece with a take-it-or-leave-it offer, set a deadline, and threaten to cut off its banks if it doesn’t agree. This could play into the hands of Greek nationalists who would argue that foreigners were again bullying Athens.
Renzi’s reform agenda rattled but still on course 1 Jun 2015 The Italian prime minister’s modest showing in regional elections weakens his hand and shows growing dissent at his domestic programme. But Matteo Renzi still has momentum and the economy is recovering. If the latter persists, he has a limited window to force change.
Banks could get stuck in FIFA penalty area 29 May 2015 Over 20 lenders are mentioned in the U.S. Department of Justice’s 164-page soccer rap sheet. Even if FIFA officials are found guilty, banks may be blameless. But UBS’s recent experience suggests any sniff of wrongdoing could change how U.S. regulators view past misdemeanours.
German job miracle keeps defying gloom-mongers 29 May 2015 Most experts predicted that January’s imposition of a national minimum wage would lead to heavy job losses. But employment in Germany keeps rising and economists are confused. The fears may yet be vindicated, although it could take a recession to show they were right.
Venezuela adds hazy Rosneft $14 bln to leaky pail 28 May 2015 President Nicolas Maduro is touting the misleading investment sum from Russia’s oil giant. Though U.S. sanctions have boosted his popularity, he can’t escape high inflation, low reserves and power shortages. A further run-up in crude prices may be one of the country’s last hopes.
The FIFA big boss guide to executive survival 28 May 2015 Soccer’s supremo Sepp Blatter may win a fifth four-year presidency at the scandal-wracked governing body. Even if he fails, his tenacity is remarkable. It owes much to FIFA’s financial success, but also cumbersome governance and tin ears. Those help all boardroom Machiavellis.
Yen slide will encounter little political friction 28 May 2015 Some Japanese officials sound ambivalent about their currency falling to 12-year lows against the dollar. But the drop isn’t unruly, and the economic pros probably outweigh the cons. Aided and abetted by monetary policy, traders can easily push the yen down further.
To fix FIFA, start with the sponsors 28 May 2015 U.S. prosecutors allege that shadowy marketing agencies diverted cash from the likes of Toyota, Santander and probably Nike to corrupt soccer officials. Big bucks are at stake. FIFA’s revenue from 2011 to 2014 was $5.7 bln. In future, contractual transparency will be paramount.