Regulation

HBOS audit probe shows limits of bank accounting

19 September 2017

KPMG was right to accept the UK bank as a “going concern” shortly before its near-collapse in 2008, a watchdog has concluded. Pre-crisis audits deserve scrutiny, but accountants cannot replace regulators. Besides, publicly flagging HBOS’ frailty would have accelerated its demise.

What we’ve learned about Brexit so far

19 September 2017

Britain’s divorce from the European Union is reaching the critical stage where talks are meant to shift from principle to detail. Progress is being slowed by bickering, technicalities and economic fog. Despite the risk of Brexit fatigue, five clear lessons stand out.

Jes Staley’s share price misery is undeserved

18 September 2017

Though the Barclays CEO has delivered on his targets the bank’s shares are down 16 pct this year, making it the UK’s worst-performing major lender. Self-inflicted regulatory and litigation worries haven’t helped. But concerns about headwinds in the U.S. and Britain are overdone.

Review: India’s rock star governor reclaims stage

15 September 2017

Raghuram Rajan was silent on India for a year after leaving the central bank. Now he calls for a rescue of bad lenders, and criticises its banknote ban. His truncated reflections in “I Do What I Do” leave the reader wanting more, but are awkward for his lower-key successor.

Viewsroom: Ray Dalio taps his inner communist

14 September 2017

Bridgewater’s founder thinks his kindred spirit resides in China’s anti-corruption czar Wang Qishan. Both seek radical transparency – though Dalio’s hunt is tied to forging a business in the Middle Kingdom. Plus: Exxon’s salvation may lie in the oil fields of West Texas.

Trump follows Obama’s lead on Chinese chip deals

14 September 2017

The U.S. president blocked a $1.3 bln takeover of Lattice Semiconductor. It’s not a new position: his predecessor was sensitive to Beijing’s ambitions and nixed a similar acquisition. With scrutiny likely to intensify, buyers and sellers can save face by rethinking these mergers.

Cox: Donald Trump is failing America’s gun lobby

13 September 2017

The candidate's campaign messaging echoed the National Rifle Association's efforts to sow fear and sell weapons. Trump promised to "come through for" the NRA, which backed him. But a profit warning from Smith & Wesson’s parent and other signs suggest he’s not delivering.

Private equity gets a double-dip on debt

14 September 2017

Hosts hate guests who dip half-eaten snacks back in the sauce. But buyout firms are doing something similar: loan documents now let them add extra debt onto already indebted companies. Loose monetary policy encourages boisterous behaviour, but maybe not for much longer.

Hong Kong is better off without dual-class shares

14 September 2017

Hong Kong’s securities watchdog has conceded in a battle for control over listing approvals, says the SCMP. Regulators can still reject proposals for unequal voting rights, which might lure tech IPOs at the expense of governance. But they'll need to get used to being unpopular.

Hadas: EU single economy eases way for separatism

13 September 2017

Catalan and Scottish nationalism have bubbled up recently. Besides sentiment, the European Union has played a part. The super-national single market not only provides economic protection, but opens up a new vision of sovereignty. It’s the same idea Brexit fans have rejected.

Ten years on, UK banks still far from utility-like

13 September 2017

A decade after the run on Northern Rock, British lenders are smaller and better capitalised. But earnings remain bumpy and subdued economic growth means they will struggle to lift earnings. An average dividend yield of 4 pct compares poorly to genuinely safe and boring utilities.

Murdochs pay price for governance scandals

12 September 2017

Fox’s bid for Sky may be delayed after a minister questioned whether phone-hacking and harassment scandals could hurt broadcasting standards. It raises the risks of an awkward investigation. Worse, the UK’s volatile politics could shift further against Fox owner Rupert Murdoch.

Goldman’s biggest asset in UK banking is lateness

11 September 2017

The investment bank will start taking British deposits under the Marcus brand next summer. A startup with Wall Street infrastructure is an appealing mix. Sure, it’s a sign Goldman’s main business is looking limp – but baggage-laden UK lenders should not be too dismissive.

Insurance giants may get another chance in China

8 September 2017

The industry watchdog in Beijing is hinting it will further open the market for foreign firms like Chubb and Manulife. China’s market has long under-delivered for global insurers. After a recent shakeup of both the regulatory regime and business, this time may be different.

EU’s antitrust creativity drive hits roadblock

6 September 2017

A case that slapped chipmaker Intel with a $1.3 bln fine has been punted back to a lower court. This is a blow for antitrust tsar Margrethe Vestager, who has tried to get as innovative in policing tech giants as the companies are themselves. Proving abuses will be harder.

China’s house rental push is past due

6 September 2017

Beijing wants more people to rent. Migrating from mortgages to leases could vent speculative pressure and put the critical property sector on a sustainable economic footing. Social customs and institutional interests will neutralise the initiative's effectiveness.

Guest view: Tax relief made for U.S. manufacturers

5 September 2017

President Trump's broad reforms probably will take many months to craft, but Congress already has a narrower bipartisan plan to help. Offering credits for putting R&D side by side with domestic factories can help productivity, argues Dhaval Jadav, the CEO of a tax consultancy.

Hong Kong’s fresh Aramco pitch is flawed

5 September 2017

Stock exchange boss Charles Li is pushing a "Primary Connect" scheme allowing Chinese punters to buy into listings in the city. The aim is to lure the bumper Saudi IPO with the prospect of a flood of retail money. But mainland investors have a better playground at home.

Telefonica’s O2 float is best placed on hold

4 September 2017

The Spanish telco has been considering an IPO of its UK arm since regulators blocked a sale in 2016. A legal row over mobile spectrum auctions would complicate pricing, and debt is less pressing since Telefonica cut its dividend. Better to delay than cancel another offering.

Water investment glass isn’t even half full

1 September 2017

Hungary’s president has issued a rallying cry for the $12 trln needed by 2030 to meet water-linked climate goals. The problem isn’t a lack of money, but emerging states’ poor governance and lack of financial nous. Multinationals and pushy investors could help change that.