U.S. oil price rise should fuel export ban’s fall 22 Jul 2013 Pipeline and railway improvements have allowed American drillers to close the gap between their product and pricier, globally traded Brent. Next should come permission to ship crude overseas. With supplies surging, producers will quickly outgrow the limits of a domestic market.
UK audit reform plan is only half cooked 22 Jul 2013 Britain’s anti-trust authority says companies should put audit contracts out to tender at least once every five years. That’s good, but an investor-backed plan for mandatory rotation after fifteen years is also needed to bolster accountancy competition. Brussels should take note.
G20 says in Moscow that tax evasion is really bad 22 Jul 2013 The world’s largest economies have agreed on a broad plan to fight multinational companies’ tax optimisation and evasion. The next step is to translate this into national laws. But Russia may not have been the best possible place to launch a global push for tax fairness.
Hugo Dixon: How to legitimise EU – decentralise 22 Jul 2013 The European Union is facing a crisis of legitimacy. The most extreme, but not only, manifestation is in the UK, where citizens may vote to quit the EU. Reforms are needed to stop Brussels interfering in things best left to nations.
Bankruptcy isn’t radical enough to save Detroit 19 Jul 2013 Scrubbing Motown’s $18.5 bln of debt can only be a first step. The sprawling city suffers from blight, woeful infrastructure, a population exodus and falling revenue. The private sector has a role to play, but fixing so many broken windows needs longer-term government help.
China’s PBOC serves reformists an amuse-bouche 19 Jul 2013 The central bank has allowed banks to lend as cheaply as they like. That smells like liberalisation, but it’s no more than a tasty morsel. Banks could even end up weaker, if rates fall for well-connected borrowers. The real meat, relaxing deposit rates, is still off the menu.
Detroit bankruptcy has lesson for euro zone 19 Jul 2013 A regional government without its own currency gives up in the face of intractable financial problems. But unlike the euro zone, no one is worrying that Motown’s mess will damage the dollar. Euro zone members have more bank issues, but their pain can also be contained.
Central bankers: Go wild, crazy even 19 Jul 2013 The recovery is slow. Monetary authorities are stymied. Bernanke is retreating, the BoJ and ECB have stalled and, despite high hopes, Mark Carney’s tenure at the BoE could be one long yawn. It is time for a remix. Breakingviews has four mischievous suggestions.
Review: The rise and fall of an Asian tycoon 19 Jul 2013 Mohsin Hamid understands corruption: his fictional portrait of a crooked yet oddly sympathetic tycoon shows how shady dealings can make or break a career. Hamid doesn’t condone skullduggery, but this detailed profile is an instructive guide to a darker side of rising Asia.
Jefferson County is back – bondholders beware 18 Jul 2013 The bankrupt Alabama county became synonymous with fraudulent financing when it defaulted on its debt five years ago. Now it needs the municipal bond market to give it a second chance. To pay off creditors, it needs $1.9 bln. The initial terms, however, don’t look promising.
Navalny verdict shows Russia unsafe for business 18 Jul 2013 The opposition leader was sentenced to five years in jail after a staged trial for graft. This is the most brazen example of Putin’s clampdown on all opponents. The Kremlin leader is clearly deaf to the need for reform. Investors should ponder - and start mapping exit routes.
Italy’s problems will stay when Berlusconi is gone 18 Jul 2013 The former prime minister faces his final appeal for a tax-fraud case on July 30. A guilty verdict will be bad news for the main centre-right and centre-left parties: neither one wants new elections. The question is what comes after Berlusconi? The answer may be more of the same.
Vietnam is back in the game for buyout firms 18 Jul 2013 Warburg Pincus is investing $200 million in the country’s largest mall owner at a time when retail sales growth is at a 10-year low. The U.S. private equity firm’s punt might be premature, but it isn’t wrong. Vietnam is outgrowing its bad reputation with foreign capitalists.
Mexico’s infrastructure blitz needs another flank 17 Jul 2013 President Peña Nieto expects some $300 bln of public and private funds to be spent on roads, broadband and the like through 2018. Such sums, however, could easily exacerbate corruption, deficits and waste. To get bang for the buck will require big investments in law and order.
Sinking Turkish lira eludes central bank’s grasp 17 Jul 2013 Efforts to stabilise the lira have been a costly failure. A big hike of the interest rate corridor ceiling on July 23 will leave Prime Minister Erdogan red-faced. Anything less would dent the central bank’s credibility and alarm the foreign investors Turkey depends on.
Carney compromise suggests BoE won’t be so loose 17 Jul 2013 The new UK central bank governor came out a winner from his first MPC meeting - but only by voting with the BoE majority that does not want additional stimulus. Dovish policy guidance may be coming, but a monetary tide probably isn’t. The pound and gilt yields could edge up.
India new FDI rules show welcome long-termism 17 Jul 2013 Letting foreigners own more of local industries like telecoms won’t kick off a rush to invest. But it suggests a desire to court longer-term inflows, and replace an unhealthy reliance on hot money. The new policies may help stem the rupee’s slide too.
GSK finds toxic side effects in Chinese market 16 Jul 2013 The UK pharma group is accused of using elaborate kickback schemes. But the Chinese combination of pervasive state involvement, underpaid doctors and coveted foreign products is almost an invitation for bad practice. A full cure requires time, money and stronger institutions.
Euro zone weakened by banks’ sovereign-debt feast 16 Jul 2013 Peripheral bonds seem impervious to rating cuts or political crises, because debt is being increasingly swallowed up by domestic banks and investors. That stifles lending, discourages reform and delays the euro zone’s recovery. The ECB could help - but only up to a point.
UK inflation shows why Carney mustn’t sink pound 16 Jul 2013 The new governor of the Bank of England may be tempted to push down the currency to push up growth. But with inflation at 2.9 pct, prices are rising much faster than wages. That’s now the chief obstacle to a decent UK recovery. Further devaluation would do more harm than good.