UniCredit ups the ante on bad-debt cleanup 12 Dec 2017 Italy’s biggest bank by assets is vowing to run down a 33 billion euro portfolio of non-core loans by 2025. It also reckons it can withstand regulators’ drive to purge lenders’ bad credit, and still increase dividends. The move will put more pressure on rivals.
Trump’s anti-WTO rhetoric hurts America first 11 Dec 2017 U.S. trade chief Robert Lighthizer has a tough message for the body’s biennial confab. The White House is also blocking new WTO appellate judges. Reforms are needed but America has won most of its complaints, including against China. Weakening it has consequences for U.S. firms.
Bitcoin futures set scene for more gambling 11 Dec 2017 The 20 pct surge on new CBOE cash-settled contracts is sedate by crypto-currency standards. There’s still cause for concern. Rather than being a useful hedge, futures make it easier to trade bitcoin without actually owning it. For now they have little utility beyond speculation.
U.S. hands HSBC CEO perfect going-away gift 11 Dec 2017 The end of a five-year agreement over money-laundering lapses removes the threat of authorities yanking the bank’s U.S. licence. HSBC devoted 8 pct of its operating expenses to compliance last year. Though those costs will stay, departing boss Stuart Gulliver can leave on a high.
Bank of England transfer defies financial gravity 11 Dec 2017 Britain’s opposition Labour party says it may move parts of the central bank to Birmingham. That may appeal to voters, but both the BBC and HSBC have found relocating expensive and difficult. The idea also ignores the reasons London’s financial centre exerts such a strong pull.
The Exchange: Marcus Ruiz Evans 8 Dec 2017 The president of Yes California leads a campaign arguing that the Golden State should become an independent country – an idea increasingly referred to as Calexit. He explains why secession would be good for the state’s economy and how he’ll get the rest of the nation to buy in.
Shareholder ethos holds back U.S. wage growth 8 Dec 2017 The U.S. economy added more jobs than expected in November but wage growth remained tepid. President Trump claims the GOP tax bill will lead to big raises but most companies plan to spend profit on buybacks and dividends. When the market is king, workers tend to come last.
Britain heads for Brexit in name only 8 Dec 2017 Theresa May’s deal with the European Union averts a chaotic divorce for now. But a fudge about the Irish border exposes the difficulty of preserving trade while leaving the bloc. A transition phase will create scope for May - or another prime minister - to make new concessions.
Leonardo is a masterpiece of Saudi contradictions 7 Dec 2017 Crown Prince Mohammed bought the $450 mln “Salvator Mundi,” a report says. The heir to an absolute monarchy professes to be a reformer and corruption fighter, yet is spending with unseen extravagance. That may not go down well at home, or with potential investors in Aramco.
China’s new regulator could tighten bank squeeze 7 Dec 2017 The China Banking Regulatory Commission’s new vice chair is a confidant of former anti-corruption czar Wang Qishan. Watchdogs are already clamping down on the financial sector. As people from Wang’s no-nonsense camp join the fray, banks and their investors should brace for more.
Fed forecasts just enough sunshine for stress tests 7 Dec 2017 The central bank wants to provide more information about its models for loan losses and other inputs in the annual exams. That would suit lenders who complain the process is too opaque. But the Fed would retain some mystery, striking a balance that boosts the test’s credibility.
Trump and Warren make odd antitrust bedfellows 6 Dec 2017 The liberal senator says mega-deals like Aetna’s $77 bln sale to CVS kill competition. She backs the DOJ fighting AT&T-Time Warner and has concerns about past merger remedies. It puts her in the same camp as the president. Such an alliance of convenience puts pressure on big M&A.
France and Germany look too alike to bond market 6 Dec 2017 The gap between French and German bond yields this week hit its lowest since 2009. Plans to revamp the way the euro zone works may spur investors to overlook differences between countries’ public finances. But a lack of discrimination is premature, and stores up fresh problems.
Wanda’s asset shuffle buys brief Beijing reprieve 5 Dec 2017 The indebted Chinese conglomerate is shuffling assets around, including a $470 million cash injection from its founder, as officials pressure firms to deleverage. The cash will help pay down $1.7 bln in offshore loans, but it will take more to escape the government penalty box.
EU fight against tax havens has flaws 5 Dec 2017 The bloc has put 17 jurisdictions, including Panama and South Korea, on a blacklist for failing to fight tax abuses. European Union countries, however, are free to decide what steps to take against offenders. A laudable drive can be undermined if some choose a lenient approach.
Brexit deal hinges on enlightened obfuscation 5 Dec 2017 A plan for Northern Ireland to accept some EU rules has met with opposition in Belfast and demands for similar treatment elsewhere. Prime Minister Theresa May's best hope is to fudge tough decisions, and use the threat of a chaotic exit – or another election – to quash dissent.
Provident Financial probe complicates salvage job 5 Dec 2017 Shares in the embattled lender fell 13 pct after UK regulators investigated its car unit. Its card business is also under scrutiny and its home credit division is reeling from a botched revamp. Financial clouds will make it harder to find a new CEO or bolster its balance sheet.
ICO bust heralds U.S. crypto-currency rules chaos 4 Dec 2017 The SEC has taken its first action against a coin offering, alleging the perpetrators fraudulently raised $15 mln. The CFTC, though, just gave the green light to bitcoin futures. The growing regulatory discord on virtual currencies increases the risks to investors.
Rushed U.S. tax bill rewards oil, real estate 4 Dec 2017 The Republican Senate plan snuck in tax breaks for oil and gas partnerships, real-estate investment trusts and other sectors. One hiccup puts the research tax credit favored by business at risk. But overall, corporate America and the wealthy may receive an early Christmas gift.
Chinese fintech Qudian dangerously reverses IPO 5 Dec 2017 The $4.1 bln micro-lender backed by Alibaba's Ant Financial intends to buy back a big slug of the stock it just debuted in October. The plan follows China's crackdown on the industry. With the full implications unclear and a share-lockup expiry looming, Qudian's move is risky.