Booing bankers should be watchdogs’ badge of honor 18 Mar 2011 Sheila Bair, chairman of the U.S. FDIC, faced rare catcalls from a mob of community lenders at a conference this week. Taken aback, she reminded them of all the good she'd done for their industry. But regulators should bask in such disdain if it means they're doing their jobs.
Japan’s virtues may help Kan solve its problems 18 Mar 2011 The nation's social cohesion and stoicism have kept a lid on looting, panic and limited power outages. The premier has played to these qualities, and since he can blame infrastructure failures on the opposition, he may be strengthened enough to tackle Japan's fiscal position.
Fed should go the extra mile on bank stress tests 18 Mar 2011 Providing information beyond a summary of these annual checkups on big U.S. banks would do more than boost confidence in the firms. Detailing why they need extra capital or, conversely, can pay out more to shareholders would also show the public that regulators are on the case.
Crude markets are being bullied by black swans 18 Mar 2011 Markets are now weighing two competing tail risks sliding demand from an injured Japan versus nofly zones in Libya and Saudi troops in Bahrain. But in the absence of black swans, the abundant flow of oil should eventually drive Brent below $100.
Portugal inches closer to sobering EU bailout 16 Mar 2011 Investors greeted a Portuguese oneyear bond auction coolly, the day after a Moody's downgrade. And the country's finance minister has admitted it might need outside help to cope with its funding problems. It looks like a euro zone bailout will come in weeks, if not days.
U.S. financial reform law faces first big barrage 16 Mar 2011 House Republicans have fashioned five bills representing a significant assault on the DoddFrank Act passed last year. The tweaks are cagily framed as boosting small business and capital formation. The success of this initial attack may hint at how much staying power the law has.
Gaddafi survival would test foreign governments 16 Mar 2011 Tough decisions must be made if the Libyan leader regains control of the country. Sanctions will need tightening to stop the flow of oil revenue with harmful consequences on the industry, making a consensus hard to achieve. And Gaddafi's success could embolden other despots.
Calpers tries to make the reality fit the politics 16 Mar 2011 With interest rates low and stock gains weak over 10 years, the California pension fund's actuary wanted to trim its assumed annual return to 7.5 pct. But that would have cost the cashstrapped state. By holding to a less achievable target, Calpers is sparing political blushes.
Fed policy heading for long, hot summer 15 Mar 2011 After changing very little on Tuesday, the FOMC's late April meeting will be the last chance to tweak its bondbuying program and arguably the last to signal rate rises if they are to happen this year. If nothing changes at that point, markets could face a stormy summer.
Japan reminds strapped officials they need buffer 15 Mar 2011 When your credit card is nearly maxed out, dealing with emergencies can be tricky. A massive rebuilding effort may stretch Japan to its financial limits. Politicians in Washington and other overspending capitals should take note of the warning.
Egypt should bite stock market bullet 15 Mar 2011 The country's stock exchange, closed since January, is likely to plunge when it finally reopens as investors sell to reflect Egypt's postrevolutionary economic reality. But stalling to protect overstretched brokerages or the currency could have much more serious consequences.
Saudi’s Bahrain intervention raises investor risk 15 Mar 2011 The presence of Saudi troops in the small kingdom can only inflame Bahrain's majority Shi'ite population. Even if protests are ultimately suppressed, the United States will be embarrassed, Iran may cause mischief and trouble could spread elsewhere.
U.S. advisory crowd of CEOs is redundant 14 Mar 2011 President Obama's new 26strong competitiveness council, headed by GE's Jeff Immelt, looks unwieldy. And his debt commission already gave him sensible ideas. The panel dresses businessfriendly windows, but what's needed is sound policy, not months waiting for predictable advice.
Chasing Amazon won’t help states much 14 Mar 2011 The Internet retailer doesn't collect sales tax in most states. Cashstrapped jurisdictions want to close the loophole. It's an easy way to find revenue without much hiss from voters and traditional retailers love the idea. But it won't go very far to closing budget gaps.
Japan catastrophe could make U.S. debt costlier 14 Mar 2011 Offloading some of its $1 trln of foreign reserves could raise cash to help rebuild after Friday's devastating earthquake. The Fed is due to end its Treasury bondbuying program in June. If Japan, the secondbiggest foreign holder, starts selling that's another support gone.
EU can use carrot to foster Arab democratisation 11 Mar 2011 Europe must seize the opportunity to help repair the damaged economies of restive Mediterranean countries and assist them in overhauling their political systems. From North Africa to Central Asia, it has a patchy record in supporting democracy. But it's worth trying again.
Tragic quake may add to inflation pressures 11 Mar 2011 The economic impact of the earthquake near Japan is not yet quantifiable. Other Pacific nations are at risk from a tsunami too. But as Japan loses some output and spends to rebuild, the quake is likely to raise demand for commodities and food, and drive Japan's debt still higher.
Were Luddites the victims of 2011-style finances? 11 Mar 2011 The British weavers who destroyed looms 200 years ago thought their unemployment was due to machinery. But there's a case to be made that inflation, money supply expansion, budget deficits and trade barriers were to blame. Maybe we haven't learned much in two centuries.
U.S. public radio needs new funding model 10 Mar 2011 Impolitic remarks by an NPR executive and a political push by Republicans have jeopardized the broadcaster's federal money. The government should support the arts but, all things considered, it may be time for a new approach. A $3 bln endowment could set a path to independence.
Regulatory arbitrage could go far beyond Basel III 10 Mar 2011 It's fun to guess whether Swiss, UK or U.S. banks will end up with tougher capital and liquidity rules. But as financial reforms play out globally, for instance in derivatives, there's also the possibility that whole business lines will migrate raising new systemic risks.