Investment drought is about more than spreadsheets 9 Feb 2017 Companies’ reluctance to invest is one of the main conundrums facing policymakers. A new Bank of England survey suggests old habits and crisis memories play a bigger role than any shortage of finance. It’s another reminder that loose monetary policy can only achieve so much.
UK student debt sale is a third-class idea 9 Feb 2017 The government is selling 12 bln pounds of student loans. If wage growth motors, the sale price could wind up looking cheap. Given its reluctance to sell RBS shares that are depressed in value, and the reduced imperative to balance the budget by 2020, it's a needless risk to run.
Chinese FX reserve crosses risky line in sand 8 Feb 2017 The country's foreign currency stash fell below $3 tln in January, the lowest in nearly 6 years. That matters less than the line that might get crossed next: the yuan weakening past 7 per dollar. That would mean eating into the reserves still further, or risking U.S. wrath.
Crisis anniversary offers $30 trln sanity check 7 Feb 2017 That's one estimate of the cost of the financial meltdown that started 10 years ago with HSBC's $1.8 bln subprime mortgage loss. With talk of a regulatory rollback in the air, the anniversary offers a timely reminder that exuberance and loose standards can cause painful damage.
UK housing policy may be answering wrong question 7 Feb 2017 The British government has some ideas to build 250,000 homes every year. But as real rents in England are below 2005 levels and the stock of surplus housing is higher, shortage of supply may not be the biggest issue. Managing rents, not house prices, should be the focus.
Cox: Politics biggest enemy of Paris Brexit hopes 7 Feb 2017 The City of Lights has been on a charm offensive with London’s financial castaways. And the pitch made to dozens of U.S., Chinese and Japanese firms – not to mention French expats – is convincing. What is less persuasive is the complacency around the Republic’s presidential race.
Indian bank is right to think big in microfinance 7 Feb 2017 A mooted $1.7 bln takeover of Bharat Financial Inclusion would help IndusInd Bank sustain rapid growth and boost profitability. It would also help secure the bank's already high valuation. However, the buyer will also inherit the political risks of lending to the very poor.
Dodd-Frank rewrite could disappoint everyone 6 Feb 2017 U.S. bankers are now hopeful Donald Trump will roll back the 2010 law. In reality, Trump's call for a review does little, and a repeal of Dodd-Frank looks a long shot. Meanwhile any talk of dilution has Democrats howling. Neither banks nor their critics will get what they want.
Look left for the next French election surprise 6 Feb 2017 Frontrunners fared badly in the primaries, and scandal is now hurting the presidential chances of early favourite Francois Fillon. Centrist reformer Emmanuel Macron has gained, but there is also an opportunity for the business-unfriendly hard left to exploit.
Ireland could join Britain in EU departure lounge 6 Feb 2017 Dublin’s unequivocally pro-Brussels stance may be tested if politics unmoors it from key trading partners like the UK and U.S. A tough Brexit deal, along with an inflated EU budget bill caused by tax inversions, could raise tricky questions about Ireland’s true interests.
Italy’s bank cleanup adds new layer of murk 6 Feb 2017 Two big lenders have written down their investments in the 3.5 bln euro Atlante bailout fund. But UniCredit and Intesa Sanpaolo disagree about the extent of the losses. A vehicle designed to hold assets that markets cannot price properly has become a source of confusion.
Romania can salvage positives from graft mess 6 Feb 2017 An attempted softening of laws against corruption sparked mass protests, a ministerial resignation and an eventual U-turn. Despite this, Romania has made progress on fighting graft. It now needs to put more effort into judicial protection – and ensure cases have credibility.
Tokyo is no economic enemy for Trump 6 Feb 2017 Japanese Premier Shinzo Abe is preparing a big package of U.S. investment and job creation to placate the president. Trump's claims of deliberate yen devaluation are wide of the mark. But Tokyo has little choice but to respond, even though it is already an important U.S. ally.
Review: The hollow promise of ending GDP worship 3 Feb 2017 Switching from the touchstone of economics to broader measures of value would be more truthful and could make the world a fairer place, Lorenzo Fioramonti argues. But his optimistic vision overlooks the inevitability of growth and integration – and humans' competitive drive.
Presidential orders can’t fix slow factory hiring 3 Feb 2017 The U.S. economy notched 227,000 jobs in January, Obama's final tally. Trump vows to rev up the pace, especially in manufacturing, but automation is limiting the growth of that line of work. The president's bully pulpit is of little use in the face of that long-term trend.
Greece is in a mess but not at the brink 3 Feb 2017 The government, its European creditors and the IMF are all being unreasonable in their own way over a bailout needed by July. The most sensible option would be for the IMF to withdraw. More likely is that if a compromise can't be found, the ruling Syriza party calls an election.
Hong Kong loses its luxury scarcity value 3 Feb 2017 Tourist arrivals from mainland China rose 3.6 pct over the New Year, and Chinese consumer spending is accelerating. If only that were enough for luxury companies who have hung their hat on the city's unique charms. Luxury isn't quite passé, but buyers have moved further afield.
Viewsroom: The cost of jingoism 2 Feb 2017 President Trump's trade-tariff threats and his temporary immigration ban risk undermining business-friendly policies like deregulation and tax cuts. Meanwhile, he has nominated a Supreme Court justice. And Under Armour takes center stage in the battle for shareholder rights.
Infrastructure builds Gary Cohn’s White House role 2 Feb 2017 The former Goldman president is drafting a plan to build roads and smart grids, which may be more doable than tax reform. His strong presence and chutzpah make him a Trump favorite. Fixing bridges and airports would solidify his leadership in economic policy over other aides.
UK breezily gives City its very own stress test 2 Feb 2017 Britain will aim for “the freest possible” trade in financial services after it leaves the EU, its White Paper says. It’s as if the sector is an immaterial contributor to the UK tax take and services surplus. The government is either foolhardy, or showing impressive sang-froid.