Bank of England pressured by Treasury mea culpa 30 Mar 2012 The UK finance ministry has published an internal report criticising its handling of the crisis. Following the Financial Services Authority’s multiple exercises in self-flagellation, the central bank’s continued refusal to publicly examine its own performance looks unsustainable.
Intel and ARM heading for bloody chip collision 29 Mar 2012 Intel dominates the market for PC processors. ARM Holdings-powered chips run nearly all phones and tablets. Their skirmishing over tablets is just the start of what is likely to become a full-fledged brawl as both firms invade the other’s territory. Investors look out.
Regulator holds key to unshackling RBS from state 28 Mar 2012 Interest from Middle Eastern funds has raised hopes the UK government might shrink its stake in the bailed-out lender. But any sale is doubtful until RBS has escaped costly state insurance. To do so, it must first persuade the Financial Services Authority it has enough capital.
With TCI’s help, Coal India could top the Sensex 28 Mar 2012 Chris Hohn’s investment fund is raising the stakes in its tussle with New Delhi over the pricing of coal. The challenge is to win the policy argument as well as the legal one. Since reform could make Coal India the biggest company quoted in Mumbai, the outcome could be win-win.
Donor row saps UK government’s austerity authority 26 Mar 2012 After a pro-business budget, the “Cash for Cameron” affair has raised concrete concerns that the Conservative-led coalition can be bought by anyone with a fat chequebook. The government’s ability to get the country to swallow ongoing deficit reduction can only be undermined.
UK’s bubble-prickers seek iron grip on banks 23 Mar 2012 The new Financial Policy Committee wants mega powers to prevent future excess, including controlling capital ratios and reining in insurers and fund managers. It’s clear the FPC will have muscle. The snag is that it has few ideas for solving the current problem: risk aversion.
BT gets better side of deal with its pension fund 23 Mar 2012 The UK telco’s stock rose 6 pct after it said its pension deficit had more than halved to 4 bln stg and unveiled a plan to shrink the liability further by 2021. The market reaction is understandable. The pension scheme’s trustees could have demanded a faster fix to the problem.
UK’s post deal should have pension bosses drooling 22 Mar 2012 Britain is to assume responsibility for Royal Mail pensions. Ministers get to offset 28 bln pounds of assets against the UK’s debt and - for now - ignore liabilities that are 10 bln pounds larger. If other pension managers could follow, they’d be queuing all along Downing Street.
UK budget deserves lukewarm applause 21 Mar 2012 George Osborne has trimmed income tax for the very rich and less well-off, and further eased the burden on corporations. But fiscal restraints mean that what the UK chancellor gives with one hand, he has to take with the other. Rebuilding Britain’s finances remains a long road.
UK’s credit easing should be just a first step 20 Mar 2012 The government has earmarked 20 billion pounds in guarantees to help provide cheaper loans to small businesses. Harnessing the UK’s low borrowing costs is welcome. But if SMEs are genuinely being starved of credit, there are several other ideas the government could explore.
Lloyds’ bonus stance smacks of double standards 16 Mar 2012 The UK bank has blocked payouts to former bosses, including ex-CEO Eric Daniels. Architects of the ill-fated HBOS deal might seem fair game. But Daniels hit targets on which awards were based, and current executives got paid. The lack of consistency undermines future pay policy.
Tapping oil stockpiles could turn into bad habit 15 Mar 2012 With U.S. fuel prices near the politically risky $4-a-gallon, Britain and the United States may release strategic reserves. It would be the second time in as many years authorities have done so. Emergency stashes should be for real supply emergencies. Iran isn’t causing one yet.
UK is on the money with exec pay reform 14 Mar 2012 British business is angry about UK government plans to give investors a binding vote on boardroom pay policies. But bosses had it coming. In any case, the proposals are proportionate – and still give companies latitude in how they reward talent.
Say hello to 100 years of financial repression 14 Mar 2012 The UK might issue ultra-long bonds. The yield would be ultra-low, courtesy of the Bank of England’s monetisation policy. Buyers would be ultra-foolish, but they may come – that’s how financial repression works. This looks like a symbolic victory for the government over savers.
TCI’s Indian activism looks low risk, high reward 14 Mar 2012 The hedge fund is threatening to sue directors of state-backed Coal India, saying they are supine to government meddling. It’s a long shot. But TCI has little to lose and even partial success could pay off. New Delhi won’t like it – although it could be the biggest beneficiary.
Prudential’s threat to quit UK isn’t just hot air 12 Mar 2012 The insurer is reviewing its domicile, citing the burden of European regulation. Upping sticks to Hong Kong wouldn’t protect Pru from all the reforms, and would yield few tax savings. But if the new rules turn out bad, decamping to its main growth market would make sense.
Executives could still carry can for HBOS disaster 9 Mar 2012 The UK regulator has stopped short of fining the lender for risk failures that led to its 2008 collapse and rescue. But the Financial Services Authority is still pursuing the individuals responsible. Judging by its damning report, they could yet face big fines or lengthy bans.
New-look LSE enhanced by LCH grab 9 Mar 2012 The bourse operator’s push into stronger businesses like “post-trade” services continues with the takeover of clearer LCH.Clearnet. Taking no more than 60 pct keeps customers onside. The complex deal also looks financially respectable. Hence a bounce in LSE stock.
Review: Bank of England exposed, but not decoded 9 Mar 2012 The central bank is as powerful as at any time in its 318-year history, yet remains stubbornly opaque. Dan Conaghan’s “The Bank” attempts to chart its recent history. Though far from definitive, the book is the best available guide to an increasingly important institution.
Forced sale of News Corp Sky stake less improbable 8 Mar 2012 The UK media watchdog has a special team assessing the U.S. media group’s fitness to run broadcaster BSkyB. That test is applied regularly anyway. But the situation’s heated politics make it a less remote possibility that authorities require Rupert Murdoch to sell.