RBS gains more than consumers from state aid fudge 27 Jul 2017 The UK bank will pay over 800 million pounds to hang on to a lending arm that European antitrust authorities wanted it to offload. The boost to competition is hard to assess. But the Treasury-negotiated deal hauls RBS closer to becoming a normal bank – at a good price.
Hadas: What Brexit forecasters got wrong 26 Jul 2017 The UK government’s pre-referendum forecasts about what leaving the EU would mean were gloomy, but not dark enough. What they missed: British inflexibility, the damage from unlinking trade, the challenge of migration and the lingering costs of national self-humiliation.
EU play for primary dealers may speed their demise 26 Jul 2017 Banks that buy EU debt directly from governments might have to move jobs out of London after Brexit to retain the privilege, Reuters reports. Such strong-arm tactics may drive some out of a business that has already grown less appealing and force a rethink of how bonds are sold.
Poland’s new tricks expose EU’s old weakness 25 Jul 2017 Judicial reforms that jeopardized the rule of law were stalled by the president, not European censure. Yet the bloc had little ability to impose sanctions anyway. As when nations flout budget rules, EU membership tests are more strictly enforced before entry than after.
Euro rally will only speed its own reversal 21 Jul 2017 The single currency has hit a two-year high against the U.S. dollar. That will depress import prices when inflation is still too low. Any hint that a stronger exchange rate will prompt the European Central Bank to leave monetary policy loose for longer will push it down again.
Central banks have no choice but to keep the faith 20 Jul 2017 ECB chief Mario Draghi and Bank of Japan boss Haruhiko Kuroda have spent trillions of euros and yen without generating much inflation. Nor is it clear when a pick-up in growth will feed through into prices. Yet they are obliged to insist their policies will work eventually.
Britain gets taster of capital markets disunion 19 Jul 2017 EU lawmakers may ban securitisation of loans where the borrower’s income isn’t proven. It’s a step towards the capital markets union Britain championed before its Brexit vote, yet one that will mostly affect UK borrowers. Britain can try and change the rules – but not for long.
Guest view: Culture can’t be bank-reform casualty 18 Jul 2017 Moves to relax U.S., UK and European regulation and supervision necessitate still greater attention on the important issues of institutional conduct, argues William Rhodes, a former Citigroup executive and co-chair of the G30’s steering committee on bank culture and governance.
Greek bonds are a bet on euro zone support 18 Jul 2017 Athens wants to issue bonds just after receiving another bailout tranche. If Greece had to finance itself at market rates it would struggle to stay solvent. But debt relief from European governments and ECB bond-buying will reduce the risk. Investors may find the wager appealing. Full view will be published shortly.
German climate change policy takes Trumpian turn 18 Jul 2017 Angela Merkel has castigated the U.S. President for pulling out of the Paris accord. Yet two German states are putting mining jobs ahead of cutting carbon emissions. If they don’t reconsider, the Chancellor’s green credentials – and the global agreement – will suffer a blow.
Central banks oust politicians as market fixation 17 Jul 2017 Investors are worrying about interest rates rather than elections. Statistics are a more reliable guide to the economic outlook than polls to political outcomes. But the path for monetary policy remains uncertain. Expect asset prices to be jumpy and their moves more synchronised.
Santander’s Popular remedy compounds original sin 14 Jul 2017 The Spanish bank is giving retail investors who lost money in the failure of Banco Popular 980 mln euros of new bonds as compensation. The practice of selling bonds to depositors has made it much harder to wind down banks in Spain and Italy. Santander is perpetuating the problem.
Macron’s choice: Europe or Gallic exceptionalism 13 Jul 2017 The French President and Germany’s Angela Merkel are keen to revamp the euro zone. It’s hard for Macron to be a role model as long as France’s budget deficit is too big – and harder still given the pressure to cut taxes quickly. This fiscal dilemma is the euro zone’s problem.
Why Europe can’t beat Google on corporate taxes 13 Jul 2017 A court has ruled the search giant is not liable for French back-tax after all. Google will face other battles over how it arranges its profits. Tech companies will always have an advantage, though. Unlike competing European countries, they can put their global interest first.
Fickleness hampers French seduction of bankers 11 Jul 2017 Gallic politicians are scrapping taxes and tweaking labour laws in an attempt to lure London-based financiers to Paris after Brexit. Though the gifts are appealing, memories of past banker-bashing are fresh. Today’s charmers could be replaced by unfriendly characters tomorrow.
Regulatory hide-and-seek shows banks’ new reality 11 Jul 2017 Lenders are using tricks to get around capital and liquidity rules, says Britain’s chief banks supervisor. Introducing more complex rules has only added to the behaviour that contributed to the last crisis. The good news is that banks are stronger, and regulators less trusting.
Cool credit markets could be own undoing 10 Jul 2017 Corporate bonds shrugged off the recent “taper tantrum” that hit government debt and equities. Investors may be betting that central banks will only slowly tighten policy, supporting demand for riskier assets. Yet unruffled markets may only hasten policymakers’ rush for the exit.
Japan and EU find solace in Trump trade rejection 6 Jul 2017 Last year both were focused on negotiations with the United States. But the U.S. president’s protectionist stance prompted them to revive long-standing talks. Though the “political agreement” is far from complete, it’s a sign that trade liberalisation can still happen.
Blueprint for UK finance free trade has many holes 6 Jul 2017 Brexit need not mean an end to open markets in financial services, chief watchdog Andrew Bailey says. His pragmatic vision would, however, require Britain to accept future EU rules and legal oversight. Even if UK politicians agree, European ones have reasons to dissent.
Exchange Podcast: Bill Emmott 5 Jul 2017 The system of political and economic openness built after World War Two is under threat, Bill Emmott argues in his new book "The Fate of the West." He joins us to discuss globalization, populism and why there's still cause for optimism about the future of liberal democracies.