Hadas: Brexit trial could go worse than expected 9 Feb 2018 Are economists biased against Brexit? If anything, their estimates, which rely on imperfect precedents, are too optimistic. Leaving the EU will impair UK growth by hitting long-term confidence, institutional strength and workforce quality – all hard to capture in a spreadsheet.
Viewsroom: The Fed’s belated Wells Fargo beating 8 Feb 2018 Chair Janet Yellen forbids the $2 trln lender from growing bigger - on her last day in the job, and 17 months after Wells’ fake-accounts scandal hit. Meanwhile, fellow financial watchdog CFPB seems to be giving hacked Equifax a free pass. Plus: how Nintendo made a comeback.
Mark Carney’s next rate rise rests on Theresa May 8 Feb 2018 The Bank of England boss says UK interest rates may rise further and sooner than previously anticipated. But that assumes a smooth exit from the European Union. If the prime minister fails to secure a transition deal in the next few months he will have to backtrack.
UniCredit’s next task is to kick-start growth 8 Feb 2018 The Italian bank is back in the black with an adjusted net profit of 3.7 bln euros. With the balance sheet fixed and much cost-cutting complete, CEO Jean Pierre Mustier can focus on boosting revenue. But ramping up product sales could be harder without its asset management arm.
Commerzbank now merits suitors as well as pity 8 Feb 2018 Normally, potential buyers would look askance at the German bank’s falling profits, rising costs and 1 pct return on tangible equity. But Commerzbank’s commitment to a 2018 dividend is a strong positive. Throw in potential deal synergies, and it should attract interest.
Europe is biggest winner of German coalition deal 7 Feb 2018 Chancellor Angela Merkel has offered the Social Democrats the finance ministry to persuade them to join a government. Even so, the SPD rank and file may not like it. But the accord implies less fiscal rigour, which could help forge better ties across the European Union.
Zuma exit spat exposes South Africa reform hurdles 7 Feb 2018 Thursday’s state of the nation address should have been delivered by President-elect Cyril Ramaphosa. Instead it was postponed because scandal-hit incumbent Jacob Zuma refused to step down. Even after he goes, political divisions could continue to hamper vital reforms.
U.S. watchdogs put crypto-currencies on long leash 6 Feb 2018 Regulators warned Congress that bitcoin and the like test the limit of current law. But for now they seem willing to let the volatile $370 bln market develop rapidly as long as they can keep a handle on fraud. A measured approach makes more sense than Asia’s heavy-handedness.
Chancellor: Beware economic models’ hidden biases 6 Feb 2018 In the age of fake news there’s one comforting thought. It’s easy to expose blatant lies. Harder to identify are possible prejudices buried in the models that inform policy decisions, as recent controversies involving Brexit's impact and the World Bank business rankings suggest.
CFPB scores too low on Equifax transparency 5 Feb 2018 The consumer-finance watchdog is dialing back its probe of the $15 bln U.S. credit-scoring firm’s massive data breach last year. Trump’s CFPB head says the regulator has gone too far in the past. Perhaps – but if protecting vital data isn’t its remit, he needs to explain what is.
Trump’s weak dollar upends Asian growth calculus 2 Feb 2018 Asia is bracing for a softer greenback. That could curb export-led growth from South Korea to Singapore and prompt a reappraisal of stock valuations. A U.S. policy shift could complicate Japan’s deflation fight and China’s ability to keep growing 6.5 percent annually.
Viewsroom: Jamie Dimon risks ruining a good run 1 Feb 2018 JPMorgan’s chairman and CEO intends to lead the bank until around 2023. Dimon has built a strong and successful company over the past 12 years. But the longer he stays, the harder it becomes to leave on an unambiguous high. Plus: Asian governments tackle bitcoin.
China’s IPO cleanup makes encouraging debut 1 Feb 2018 Beijing regulators just rejected six new-listing applications in a single day, including one from Hong Kong-traded psychiatric hospital chain Wenzhou Kangning. Enforcing tougher standards could lead to broader reforms. The risk is empowering entrenched bureaucrats even more.
Trump policy agenda starts to stick to the script 30 Jan 2018 The U.S. president’s first State of the Union address praised fast growth and recent tax cuts. He talked immigration and promised $1.5 trln for infrastructure, but the speech contained few surprises. A consistent platform is starting to emerge from the noise.
Mega-deals could be prisoners in China trade war 31 Jan 2018 It has been years since Beijing trustbusters vetoed a merger of two foreign companies. The restraint may be tested if Donald Trump follows through on his anti-China bluster. ADM, Bain and Qualcomm are potential captives, especially since chips and grain are sensitive sectors.
Holding: Mickey Mouse is due trip out of copyright 30 Jan 2018 The valuable rodent will follow other creations into the public domain if Congress allows 95 years of legal protection to expire after 2018. Disney would squeak, but artists, internet users and, yes, Google should cheer. Another extension would leave lawmakers looking like rats.
Brexit leak nudges UK towards softer withdrawal 30 Jan 2018 State papers reportedly show the country will lose in every scenario after it leaves the EU. That will inflame tensions within the Conservative Party and government. Sadly for anti-Brexiteers, the upshot is more likely a less abrupt schism than a scrapping of the entire process.
Fed’s inflation-target rethink dodges big question 29 Jan 2018 Some U.S. rate-setters wonder about their 2 percent goal – both its level and whether it’s more a ceiling or a long-term average. The debate is welcome but could be even more radical. Today’s real issue is whether central bankers can fully explain, let alone control, inflation.
Italo valuation underpinned by racy growth 29 Jan 2018 Europe’s first private fast-train operator will list next month. The track Italo runs on is owned by Italy’s incumbent rail group, a competitor, and a 1.7 bln euro valuation assumes rapid growth. But low-cost efficiency and EU train liberalization provide a rationale.
U.S. economic health falls short of stock optimism 26 Jan 2018 GDP growth clocked in at 2.6 percent in the fourth quarter. That's decent but it fell short of expectations despite a strong 6 percent gain in the S&P 500 for the period. It’s a reminder that Donald Trump's favorite performance metric at best loosely reflects the broader economy.