Financial Services

Hadas: Hong Kong teaches lessons on taming China

19 June 2019

The Asian financial hub is a special case, but its mass protests make clear that single-minded resolve can push back against an increasingly prosperous and autocratic People’s Republic. Similar focus would help foreign businesses and governments. Donald Trump is mostly failing.

Facebook throws down crypto-gauntlet to critics

18 June 2019

The social network’s poor track record on privacy makes it an unlikely creator of digital money. Yet it boasts 2.4 bln users and has enlisted some of the biggest names in tech and finance as partners. The new currency, Libra, is a bet that Facebook’s trust problems are overblown.

Sweden provides a cautionary digital tale for HSBC

18 June 2019

Hong Kong’s new online banking licences open the UK-based titan to new challenges in a market that accounts for 30% of pre-tax profit. Scandinavian giants such as Swedbank quickly fell prey to startups. And HSBC will be up against the likes of tech-savvy Alibaba and Tencent.

UBS sets a troubling precedent in China

17 June 2019

The Swiss bank put economist Paul Donovan on leave after misconstrued comments triggered outrage in the mainland. Local rivals fed the unwarranted flare-up. The episode hints at new pressures for outsiders in the country; excessive subservience, however, creates bigger headaches.

China’s UK stock debutante lacks a return ticket

14 June 2019

Huatai Securities is set to become the first Shanghai-listed company to offer depositary receipts in London, raising up to $1.7 bln. Its pioneer status should be good marketing for the broker. Plans by UK-listed companies to make the reverse trip, however, remain a distant dream.

China audit crackdown is a Wall Street nightmare

13 June 2019

U.S. Senator Marco Rubio wants to force mainland companies listed on American exchanges to submit to local oversight - or leave. The problem is real. But torching shares with a market value of roughly $1.8 trln and millions in fees is a heavy price to pay for transparency.

Goldman’s grab for silver pound is win-win

11 June 2019

The Wall Street giant’s Marcus retail bank is teaming up with Britain’s Saga, which specialises in products for over-50s. The odd bedfellows both benefit. Goldman taps wealthy baby boomers and the UK company gets commission while attracting much-needed customers.

India hurts itself with clumsy Big Four blitz

11 June 2019

After punishing PwC and EY, New Delhi wants a five-year audit ban on Deloitte and KPMG’s affiliate for alleged failings at shadow bank IL&FS. The process hardly reflects the good governance India is pushing. And it’s unclear local firms can handle all the international business.

UK frozen fund exposes regulator’s limitations

10 June 2019

The week after a prominent money manager suspended withdrawals, the head of the UK financial watchdog said rules on illiquid assets in investment funds may need a rethink. Given EU laws limit his room for manoeuvre, Andrew Bailey may not be able to deliver major changes.

Anbang’s Dutch cast-off hopes for third time lucky

10 June 2019

Apollo-backed Athora is paying the defunct Chinese group 2.5 bln euros for insurer Vivat, its third owner in five years. The sale spares the blushes of the Dutch regulator for approving the previous sale. The new Bermuda-based owner is not risk-free but looks relatively safer.

Millennials help JPMorgan learn from failure

6 June 2019

The $350 bln U.S. lender is closing a clumsily conceived digital account for young professionals. JPMorgan has made bigger gaffes, and companies like Alphabet make a feature of their mistakes. The ability to weather flops is why innovation favors those with big balance sheets.

Cox: Bruno Le Maire’s an awesome investment banker

6 June 2019

That’s one explanation for France’s finance minister torpedoing the $35 bln Fiat-Renault merger, if he now revives it with Paris at the wheel. More likely he’s mimicking President de Gaulle - who roughly expropriated the carmaker after the war - and doing France no favours.

Mario Draghi puts easing back in play on way out

6 June 2019

The ECB boss is set to end his eight-year term without once raising interest rates. Some colleagues have even floated the possibility of further cuts or more asset buying. His successor will have to figure out how to boost inflation and growth without banks scaling back lending.

UK fund blowup leaves cheerleaders burned

6 June 2019

Shares in the $12 billion investment supermarket Hargreaves Lansdown have slid by 12% after a fund it promoted run by star manager Neil Woodford froze redemptions. The mess could cause clients to pull money. To keep them, Hargreaves may need to sacrifice its high fees.

Wells Fargo CEO hunt is chicken-and-egg dilemma

6 June 2019

The scandal-racked U.S. lender may make its interim chief permanent, a suggestion it can’t find an outsider to take the job. Wells Fargo needs a strong boss to mend regulatory fences – but with so much hostility, it may be hard and expensive to get someone who fits the bill.

SEC’s new conflict rule does investors few favors

5 June 2019

The U.S. securities watchdog is tightening conduct standards a bit for brokers while loosening them for investment advisers. The industry-friendly fudge leaves investors to fend for themselves. Sharp dissent within the commission underscores the weakness of that approach.

UK bank watchdog throws wrench into hostile M&A

5 June 2019

Lender Non-Standard Finance scrapped its $1.4 bln bid for Provident Financial after the UK regulator took a harsher-than-expected view on capital. It didn’t help that many shareholders hated the deal. The strict approach means bankers will shy away from similar raids in future.

China’s censors expose a truth about corporate JVs

4 June 2019

Reuters’ 30th anniversary coverage of Tiananmen was blocked by Blackstone-backed partner Refinitiv in China amid pressure from Beijing. The $20 bln data provider’s priorities deviate from those of the news publisher. It’s a prime example of how partnerships can be strained.

UK fund wreck shows risk of overactive management

4 June 2019

Stock-picker Neil Woodford had to halt redemptions after outflows. Contrarian bets on cheap stocks and unquoted companies were ill-suited to a $5 bln fund that allowed clients to withdraw money easily. Manager hubris is another reason for investors to use passive funds instead.

Guest view: Innovation transforms central banking

3 June 2019

Technology is upending payments and regulation, writes the Bank for International Settlements’ Agustin Carstens. As policymakers rise to the challenge, and even study the possibility of issuing digital currencies themselves, monetary and financial stability is their pole star.