Scrapping UK bank levy is easy post-Brexit win 16 Jan 2018 As Britain leaves the European Union, the UK government is eager to persuade lenders to stay in London. But watering down regulations would risk irking Brussels. Getting rid of the surcharge on banks' balance sheets would be a simpler way to dust down the welcome mat.
Car lenders’ real risk is fines, not writedowns 15 Jan 2018 The rapid growth of UK auto finance has led to a glut of shiny new motors and twitchy regulators. Banks and carmakers can absorb a hefty drop in used-car prices. The bigger hazard is that lenders may cut corners to keep the market ticking over and end up paying conduct fines.
Corporate loans can propel Europe’s bank recovery 15 Jan 2018 Lending to companies has seen minimal growth in recent years, official data shows. A raft of positive economic data should provide the catalyst for increased demand. It would be a welcome way for slimmed-down lenders to give revenue a leg-up.
Markets start doing Mario Draghi’s job for him 12 Jan 2018 The euro hit three-year highs and government bond yields rose after a hint the ECB boss may rethink how long ultra-loose policy will last. The moves amount to tighter monetary conditions. That buys rate-setters time to phase out negative rates even though growth is picking up.
German economic success lays trap for Merkel 11 Jan 2018 The strongest growth in six years and the rude health of public finances may tempt a weakened Chancellor Angela Merkel into budget giveaways. But low interest payments flatter the fiscal picture and won’t endure. Better to invest in infrastructure and education than to cut taxes.
Ryanair pilots are key to regaining European crown 11 Jan 2018 Lufthansa overtook the Irish carrier to become Europe’s largest airline in 2017. Though acquisitions boosted the German group, Ryanair’s target of 200 mln passengers by 2024 depends on steady expansion. Unless it can win over irate pilots, its growth prospects will be grounded.
M&S held back by dowdy online look 11 Jan 2018 The high street retailer’s food and clothing arms met quarterly forecasts, but both have strategic issues. M&S could dearly use the 25 pct-plus online sales growth seen by smaller rivals like Boohoo.com. Its current measly 3 pct showing is exacerbating its other problems.
Italy’s pension U-turn would try markets’ patience 10 Jan 2018 Centre-right parties, frontrunners in March elections, have vowed to scrap a key pension reform passed during the 2011 crisis. The law is rigid, but axing it would hurt young Italians and widen Rome’s fiscal deficit. Investors would have a reason to avoid Italian debt.
German workers may frustrate ECB’s inflation hopes 9 Jan 2018 Industrial staff in Europe’s biggest economy are striking for higher pay. They may, however, trim wage demands in return for flexible working. If pay pressures fail to flare in such a tight labour market, the European Central Bank can hardly count on them surfacing elsewhere.
Sutherland embodied ups and downs of globalisation 8 Jan 2018 Former European Commissioner, trade chief and BP chair Peter Sutherland, who has died at 71, worked to make it easier for goods, capital and people to cross borders. His triumphs were blotted by corporate failures. Yet his legacy deserves to survive the current backlash.
Greek banks’ sour loans face reality check in 2018 5 Jan 2018 Lenders plan to shrink their bad debts by 37 pct over two years, including through sales. A recovering economy and falling government bond yields should help. But without a clearer picture of what buyers might pay, shareholders have little clarity over how much pain lies ahead.
Anti-euro debate rears its head in Italy 5 Jan 2018 Northern League leader Matteo Salvini has reiterated his opposition to the single currency. Growing Italian discontent with the EU could make an anti-euro stance a vote-winner in upcoming elections. Despite Europe’s economic revival, monetary union remains a political target.
Germany will follow money in EU top jobs carve-up 4 Jan 2018 Jockeying to replace the region’s most powerful people, including European Central Bank boss Mario Draghi, will begin in earnest in 2018. Proposed new posts like a euro zone finance minister complicate the contest. Berlin will prefer control of purse strings to interest rates.
EU’s market big bang offers clear pain, fuzzy gain 3 Jan 2018 Reforms bundled in the MiFID II directive aim to make finance fairer and safer. Rules that put a price on bank research and force trading out of opaque venues will cost over 2 bln euros to implement. Yet some exchanges face delays. In a global market, loopholes may also open up.
Italy will go back to its old ways in 2018 2 Jan 2018 The country’s flawed electoral law will produce a hung parliament in national polls. Reformist forces will be weaker while former Prime Minister Silvio Berlusconi will gain traction. A return to the frail coalitions of the past makes it harder to cut public debt and red tape.
Viewsroom: Investors target sexual misconduct 29 Dec 2017 Companies that sweep settlements for bad behavior under the carpet will feel shareholder ire in 2018, Breakingviews predicts. Plus, Apple will float past the EU’s roving eye, splintering political parties are a ticking U.S. time bomb and bank bosses may hang up their hats.
The Exchange: Professor Anand Menon 28 Dec 2017 The “Brexit and British Politics” author explains how last year’s vote to leave the EU became the UK’s defining political issue. He says longer-term political undercurrents helped tip the balance towards Leave – and will dictate the type of Brexit the country ends up with.
Bank clients will learn the value of data in 2018 28 Dec 2017 New EU regulations will force lenders to share account information with competitors - subject to savers’ consent. Up to two-fifths of banks’ revenue could be at stake. New entrants will need to overcome privacy concerns. Even so, customers will discover what their data is worth.
Catalonia poll delivers no Christmas joy 22 Dec 2017 Parties seeking to break with Spain won a majority of seats in local elections. Their support didn’t strengthen, but it didn’t really weaken either. PM Mariano Rajoy now faces the challenge of appeasing the region with greater autonomy. The political uncertainty will linger.
Bank compliance-cost explosion will abate in 2018 22 Dec 2017 Next year watchdogs will finalise big set-piece regimes for capital levels and investor protection. For banks from JPMorgan to HSBC, rampant growth in spending on due diligence, reporting and the like will level off. That in turn should be positive for lending margins.