Draghi’s taper tizzy is sign of dangers to come 29 Jun 2017 Comments by ECB chief Mario Draghi drove up bond yields and the euro, despite later protestations that markets had misread him. The ado owes more to investor complacency than fuzzy talk. It highlights traders’ twitchiness and the challenges in withdrawing ultra-loose policy.
Lessons from Europe’s tricky trio of bank rescues 29 Jun 2017 Creditors saved Britain’s Co-operative Bank, Spain’s Popular was sold, and two Italian lenders received a bailout. Though circumstances differ, the common theme is that regulators remain wary of winding down troubled banks. New capital rules will eventually make the task easier.
Draghi’s hints have more clout than Yellen’s deeds 28 Jun 2017 ECB chief Mario Draghi had more market impact by alluding to higher rates than Fed Chair Janet Yellen did by hiking them two weeks ago. That fits a recent pattern: central bankers who have yet to tighten policy are more apt to upset expectations – and that’s what moves prices.
Google’s EU fine more about principle than money 27 Jun 2017 While a 2.4 billion euro penalty is the biggest Europe has ever applied for antitrust violations, Google is rich enough to absorb the hit. More damaging, if it sticks, is the new idea that the search giant ought not to use its market dominance to privilege its own products.
Bank of England tries surrogate rate hike 27 Jun 2017 The central bank’s bubble-pricking committee is raising the minimum capital ratio for UK banks by up to a full percentage point. The surgical tool may help to rein in frothy consumer lending. But the blunt instrument of higher policy rates cannot be delayed forever.
Germany can jump growth hurdle courtesy of Brexit 27 Jun 2017 Europe’s biggest economy is expanding so quickly that there’s a growing dearth of skilled labour. The shortage may be severe enough to depress the long-term growth rate, the Bundesbank says. One way to plug the gap is to attract EU workers who no longer feel welcome in Britain.
Brexit assurances give EU citizens scant comfort 26 Jun 2017 The government has told Europeans they will not be forced to leave the United Kingdom. That’s welcome. But many grey areas will depend on the judgement of overworked bureaucrats. Worse still, any pledges could be rendered invalid if Britain crashes out of the EU without a deal.
Nestle’s big problem is its crunchy governance 26 Jun 2017 Hedge fund Third Point’s ideas for the Swiss maker of KitKat are sensible but obvious. Nestle is already weighing up asset sales. It has set and missed targets before. Shaking up the company’s slow-moving culture would achieve more – starting with a new chairman.
Merkel’s best economic policy belongs to her rival 26 Jun 2017 The German Chancellor has a record of swiping others’ ideas. She could usefully repeat the trick with the Social Democrats’ Martin Schulz. His pledge to invest more and cut taxes for those on low incomes is better than anything her centre-right party has come up with so far.
Brexit one year on: an alternative history 23 Jun 2017 It has been a year since Britain voted narrowly to remain in the EU, a (fake) bank CEO writes in a memo to staff. Few expected uncertainty would linger so long after the referendum. Austerity and populism point to challenges in the UK. Thankfully, the euro zone looks attractive.
Cox: Milan is dark horse in post-Brexit bank race 22 Jun 2017 The city that taught London about lending lags Paris and Frankfurt in pitching its appeal as a financial center. Fashionable lateness is a Lombard charm. So are fine universities, clever financiers, tax incentives, a strong work ethic – and easy access to beaches and mountains.
Theresa May’s plan still has hard Brexit core 21 Jun 2017 The quest for a parliamentary majority has forced Britain’s prime minister to curb her ambition. Planned reforms to pensions, schools and company pay have been shoved aside. Support for her Brexit-heavy agenda is uncertain, though. The government’s future remains in the balance.
Food IPO to deliver Rocket Internet relaunch 19 Jun 2017 Germany’s struggling tech investor is on the cusp of its first startup listing. The cash that it will pocket if fast-growing food logistics group Delivery Hero meets its aim of raising $1 billion will come in handy. The morale boost from a successful exit is even more important.
Co-op Bank rescue requires a fair wind 19 Jun 2017 The hedge funds who own the ethical UK lender’s debt and shares are in a good position to drive a tough bargain. If they could agree to buy the bank for a little less than the 750 mln pounds Co-op says it needs, their investment could pay off. But the numbers are finely balanced.
Italy tests EU’s bank bail-in regime to the limit 19 Jun 2017 European regulators will block Rome’s plan to rescue two small lenders, according to a report. A scheme to save Monte dei Paschi has also run into trouble. Spain’s example of winding down failing banks is hard to follow. The government may yet have to help in any solution.
Publicis broadcasts ad world’s shortcomings 19 Jun 2017 A shareholder group says the French media agency flattered its operating margin by including a one-off compensation payment. The company defends its accounting but the case is a dose of unhelpful publicity for an industry facing a bid-rigging probe and claims of opaque pricing.
Macron has the levers to transform French economy 18 Jun 2017 The Gallic president’s talent for upending politics is beyond doubt after his party won a huge parliamentary majority. He now has a free hand to pass labour and tax reforms. His legacy hinges on whether he can lay the foundations for future prosperity without jeopardising growth.
Kohl will be outlived by his German euro-vision 16 Jun 2017 The former chancellor, dead at 87, was one of Europe's pre-eminent postwar leaders. He was an architect of his country's reunification and Europe’s common currency. Kohl also gave Angela Merkel, then an unknown East German chemist, her big political break. His work will endure.
Europe and U.S. clash over who bullies the bullies 16 Jun 2017 Germany has bristled at draft U.S. sanctions against Russia, claiming the global policeman is overplaying its clout. Europe is readying a big fine for tech giant Google for doing something similar. Bullies aren’t easily toppled, but countries are harder to rein in than companies.
Italian shipping deal torpedoes single market myth 16 Jun 2017 French President Macron is griping over Italian shipbuilder Fincantieri’s bid to buy a stake in a French firm. The deal could create an EU champion, but compromise French jobs. Macron is a fervent believer in Europe – but domestic concerns don’t sit easily with idealism.