US economy is a victim of its own success 25 Apr 2024 The United States emerged as the world’s growth engine at the IMF summit last week. In this Viewsroom podcast, Breakingviews columnists debate whether this debt-fuelled strength means that interest rates will stay high for longer and how that could raise the risk of a recession.
EU Fannie Mae idea is bad answer to good question 25 Apr 2024 A report led by former French central banker Christian Noyer advocates more securitisation to help fund $1 trln of annual green and digital investments. He’s right that bank balance sheets need unclogging. But subsidising the slicing and dicing of mortgages isn’t worth the risk.
Silicon Valley models value of noncompete ban 24 Apr 2024 A new FTC rule forbids US companies from stopping employees joining a rival, or starting one. Freeing up opportunities for a fifth of the workforce should boost pay. California’s tech hub also showcases other benefits of labor mobility. Intel, for example, exists because of it.
Macron wades into a very French debt crisis 24 Apr 2024 Some investors are avoiding the country’s bonds after its budget deficit topped 5% of GDP. Paris is unlikely to require an IMF or European bailout. But President Emmanuel Macron has to bring public finances under control. That will come at a heavy political and economic price.
Stakes for India’s election outcome widen 22 Apr 2024 Prime Minister Modi’s BJP and rival Congress party promise to create jobs in their manifestos but differ somewhat on how to achieve the goal and on government spending. As India's bonds are added to global indices, a return to profligacy would be extra painful.
What to do about the EU’s relative decline 22 Apr 2024 The European Union will become marginalised if it continues to shrink compared with other regions. Two former Italian prime ministers, Enrico Letta and Mario Draghi, are coming up with remedies. But anxious leaders may lack the will to drink the necessary medicine.
Vietnam’s stability gets rude $24 bln shock 18 Apr 2024 At nearly 6% of GDP, a rescue of Saigon Commercial Bank is just shy of how much rich nations spent on bailouts during the financial crisis. The fallout will ripple through boardrooms around the world. The Asian country looks unstable as its importance in supply chains rises.
Czech Sphinx may need to pay up for UK mail morsel 17 Apr 2024 Daniel Kretinsky has been rebuffed in a bid to buy the 72% of 3 bln pound International Distributions Services he doesn’t already own. The Czech billionaire has deep enough pockets to pay more for the owner of Royal Mail. But his target’s board has grounds to dig its heels in.
EU bank-saving raid can boost tired capital market 17 Apr 2024 European households have 33 trln euros of rainy-day cash, but not much invested in equities. Former Italian PM Enrico Letta reckons savers could fund the green transition if they had access to better stock funds. Forcing countries to lower tax and other barriers would help.
Why rich nations have to keep helping poorer ones 16 Apr 2024 The world faces many onerous financial and climate challenges. Still, as Axel van Trotsenburg, the World Bank’s Senior Managing Director, explains in this Exchange podcast, governments and companies in advanced economies cannot afford to stop supporting developing ones.
Look out for a return of the US bond rollercoaster 16 Apr 2024 As short-term interest rates spiked, longer-term borrowing costs have lagged. The yield on three-month US Treasury bonds has exceeded the return on 10-year securities for 76 weeks, a near record. If this anomaly unwinds, falling bond prices could hurt fund managers and Uncle Sam.
China is a tale of at least two economies 16 Apr 2024 GDP growth comfortably beat expectations, with robustness in manufacturing and green shoots in others like catering. Yet near-zero inflation and sluggish lending point to broader problems, while real estate’s woes endure. It complicates Beijing’s search for suitable stimulus.
Singapore’s new leader will have no honeymoon 16 Apr 2024 Prime Minister Lee Hsien Loong will hand over power next month in a well-planned move. His successor Lawrence Wong needs to shore up the ruling party’s votes ahead of elections, manage Singapore’s growing pains as a finance hub, and keep China happy. There won’t be any easy wins.
Middle East is complicating West’s grand strategy 15 Apr 2024 The U.S. and its allies wanted to focus on Russia and China. But the Gaza war - and now a conflict between Iran and Israel - is distracting them. It has also undermined support from poorer nations and boosted Donald Trump’s chances of returning to the White House.
BP takeover is both appealing and daunting 12 Apr 2024 Abu Dhabi National Oil Company recently considered buying its $110 bln British peer. It’s unlikely to be the only suitor. BP trades at a discount to other oil giants and recently installed a new CEO. But UK security concerns and EU antitrust rules present formidable hurdles.
Swiss too-big-to-fail rules are too timid to work 10 Apr 2024 Following the Credit Suisse disaster, Finance Minister Karin Keller-Sutter will give the country’s bank regulator more teeth and raise capital requirements for $100 bln UBS. It all helps. However, there’s no sign authorities will be any more willing to wind down a big bank.
Airbus obsessives have a shaky grasp of history 9 Apr 2024 The $140 bln pan-European group is flying high as rival Boeing stutters. Now carmakers and others are wondering if similar collaboration could help them face down overseas competitors. But Airbus’s idiosyncrasies and convoluted road to success make copycat plans pie-in-the-sky.
Next Chinese trade war could benefit the planet 8 Apr 2024 As Beijing floods the world with cheap green goods, the West will put up trade barriers. That will delay the energy transition in the United States and EU. But the glut of EVs, solar panels and the like will speed it up in China and much of the Global South.
Germany sovereign pension fund is sound but small 3 Apr 2024 Berlin will borrow to invest up to 200 bln euros in global equities to help pay for the retirement of the country’s fast-ageing population. The vehicle’s modest size will limit its long-term impact, but Europe can learn from this blend of public and private schemes.
TSMC’s most complex engineering task is itself 3 Apr 2024 The $625 bln chipmaker has built a monopoly in advanced semiconductors by staying in Taiwan. Now it’s expanding abroad, spurred by subsidies and US-China tensions. Despite higher costs, it can generate decent returns. The bigger challenge will be keeping its technological edge.