EMEA

Barclays’ star trader exit won’t be the last

17 August 2011

The UK bank is parting company with big-shot commodities trader Todd Edgar. Curbs on proprietary trading are one factor, and his contract terms may make it logical to go now. But with revenues in trading under pressure, the underlying trend is shrinkage in any case.

Europe shouldn’t dally on Syrian oil boycott

17 August 2011

Proceeds from the country’s oil exports are helping to prop up an increasingly brutal regime. Global markets can withstand the loss of Syria’s supplies. Even if there is a chance that Syria can circumvent sanctions, they remain the best tool available to weaken the regime.

Balanced budget laws are flawed but not useless

16 August 2011

Sarkozy and Merkel like them, and they feature in America, too. But politicians often fudge the numbers, or just change the rules. Nonetheless, in reasonably honest systems such laws slow the build-up of deficits. Perhaps as importantly, they also stigmatize bad behavior.

German slowdown adds to pressure on euro zone

16 August 2011

Weak Q2 GDP confirms fears that the EU’s largest economy has entered a soft patch. That makes it harder for Europe to grow its way out of crisis. The euro zone can’t afford to relax near-term fiscal austerity just yet. But further rate hikes by the ECB must now be on hold.

Solar firm’s demise signals gray industry forecast

16 August 2011

Onetime investor darling Evergreen Solar, among the first U.S. green energy companies to go public, just went bankrupt, victimized by a global supply glut. Growing Chinese competition and waning European subsidies mean the solar sector will probably get darker before the dawn.

Italy’s imperfect budget faces bumpy ride

15 August 2011

There’s mounting public anger at Rome’s accelerated austerity programme, in particular its tax on high earners. Debt market jitters are likely as the measures are debated in coming weeks. Still, it’s hard to see the package being rejected - though it may well be modified.

Euro bailout fund could survive French downgrade

15 August 2011

France’s triple-A rating is the weak link in the soon-to-be-expanded European Financial Stability Facility. A downgrade would almost certainly dent the rescue fund’s top rating, pushing up borrowing costs for bailed-out countries. But this need not be a disaster.

Russia needs to kick-start pension reform

15 August 2011

A rapidly rising state pension bill will become a crippling burden without serious reforms. The latter is the key not only to addressing deteriorating public finances, but also to developing flimsy capital markets. A pity Russia’s leaders are so shy about the sensitive issue.

Korea’s leveraged bets put it at risk of contagion

12 August 2011

Seoul’s stock market fell further than the U.S. this month - 16 pct. South Korea relies heavily on European credit and a U.S. recession would threaten its exports. But the popularity of loans and derivatives to bet on stocks makes Seoul susceptible to even more dramatic declines.

Split EU regulators weakened by dubious short ban

12 August 2011

Without the cover of European unanimity, countries that imposed short-selling curbs have made it look like they have something real to worry about. Bank shares are still gyrating - hardly evidence of a more stable market. Watchdogs risk suffering a hit to credibility.

France needs resolve to avoid losing triple-A

11 August 2011

Debt and the deficit are high, regardless of the cost of euro zone bailouts. France has a tough plan. But extra measures, like reforming local government and removing VAT exemptions, are needed. Regrettably, as in the U.S., there are political obstacles and an election looms.

Financial lifeboats starting to get crowded

11 August 2011

Safety from sinking stocks has been sought in Treasuries, and even bonds backed by U.S. homes. But other places of refuge like the Swiss franc and gold showed on Thursday how quickly they can be rocked when too many investors pile in. Havens aren’t immune to mania either.

European market meddling would not be worth it

11 August 2011

Shares have jumped on expectations that some countries will impose short-selling bans. The desire to protect banks from a potentially self-fulfilling loss of confidence is understandable. But changing the rules in volatile times would risk damaging markets in the longer term.

Sweet Swiss-German tax deal will be hard to repeat

11 August 2011

Bern has agreed to collect tax and penalties from accounts held by tax-dodging Germans. But Swiss bank secrecy remains intact, and lenders will avoid prosecution for past crimes. The revenue hit is also manageable. An investigation by U.S. authorities is unlikely to end so well.

Central banks at the limits

10 August 2011

QE or not QE? Fears of renewed global recession come as central bankers seem short of options. Money printing carries big risks, and failed currency interventions add to the impression of impotence. The radical solutions are there. But they might be better kept locked away.

Italy still vulnerable despite ECB covering fire

9 August 2011

The European Central Bank’s bond buying has brought down Italian yields, yet Rome is still in markets’ sights. The government plans to accelerate fiscal measures and labour reform, but real change could take time, and growth may disappoint. Italy cannot afford to delay.

London’s safe-haven status faces another threat

9 August 2011

Images of rioting across the capital have been beamed around the world. It’s another factor that could make London less attractive for globally mobile workers and investors. Though the government should not hesitate in its austerity policies, it needs to prove the city is safe.

London riots strike another blow to confidence

8 August 2011

A third day of violent clashes and looting around the city are being put down to anti-police sentiment, social division, summer boredom and BlackBerry-coordinated unrest. Whatever the causes, the images from the financial capital can only hurt already fragile markets.

ECB’s bazooka has a limited shelf life

8 August 2011

The central bank’s decision to buy Italian and Spanish bonds has calmed investors’ nerves. But the ECB is only buying time until the euro zone governments’ bailout facility is ready to step in. And the repercussions of Friday’s U.S. ratings downgrade could limit future rescues.

Panic and crisis need different solutions

5 August 2011

Markets are panicking amid fears of world recession. That looks overdone for now, and falling commodity prices support growth. So policymakers should keep cool. The euro zone faces systemic crisis but conventional policy would help: Italy and Spain must tighten fiscally - fast.