Regulation

Nordic banks’ soft regulators invite U.S. wrath

19 June 2019

Shares in Danske and Swedbank have fallen sharply due to concerns about American probes into money laundering. A $900 million fine by Dutch regulators helped ING escape U.S. ire for similar breaches. Laws limiting penalties in Scandinavia mean banks there may not be so lucky.

Central banks can only nudge towards greener world

18 June 2019

The Bank of France boss says climate change may end up being a stagflationary shock. That’s a good reason for rate-setters convening in Portugal to care about global warming. But meddling too much may imperil their independence. It’s up to governments to make a real difference.

Silicon Valley struggles to crack the D.C. code

13 June 2019

Alphabet is the latest big tech firm to revamp its Washington lobbying. Google’s parent is also spending more, doling out $22 mln last year. Facebook and others are doing the same. Until they show they are engineering change within, their effort to sway outsiders will fall flat.

Trump gives China’s homegrown tech goal a boost

13 June 2019

Beijing’s move to grant 5G telecom licences early is a show of trade war bravura, given the foreign inputs required. Much of its industrial policy, though, has been about encouraging long-term self-sufficiency. Washington’s assault on equipment-maker Huawei now leaves no choice.

Boeing order drought compounds 737 MAX woes

12 June 2019

Airlines have turned stingy this year, ordering fewer planes from the $200 bln aerospace giant and 100 bln euro rival Airbus. Boeing already faces a long delay getting its grounded jet back in the air. A weakening aviation market is the last thing the company and its owners need.

India hurts itself with clumsy Big Four blitz

11 June 2019

After punishing PwC and EY, New Delhi wants a five-year audit ban on Deloitte and KPMG’s affiliate for alleged failings at shadow bank IL&FS. The process hardly reflects the good governance India is pushing. And it’s unclear local firms can handle all the international business.

UK frozen fund exposes regulator’s limitations

10 June 2019

The week after a prominent money manager suspended withdrawals, the head of the UK financial watchdog said rules on illiquid assets in investment funds may need a rethink. Given EU laws limit his room for manoeuvre, Andrew Bailey may not be able to deliver major changes.

Viewsroom: Hong Kong’s scary extradition idea

6 June 2019

The territory's government, under pressure from Beijing, is trying to ram through a rule change that would allow suspects to be transferred to mainland courts. Foreign executives have cause to be worried. Plus: Steve Bannon wants to ban Chinese IPOs from New York.

Beijing needs to pick a bank bailout message

5 June 2019

Regulators downplayed their decision to take over troubled Baoshang Bank, just as another small lender with over $100 bln in assets said auditor EY quit. Officials can rescue banks, or not, but history shows they need to be clear about their reasoning when markets are anxious.

Chinese vocational school IPO taps job anxiety

5 June 2019

China East Education has raised $625 mln in Hong Kong, valuing it at $3.1 bln. Beijing’s push to retrain millions of laid-off workers could boost its bottom line, but the market is fragmented, and earnings are volatile. This price implies very optimistic growth expectations.

Beijing tries the patience of Tiananmen’s children

4 June 2019

After crushing student protests in 1989, the government promised prosperity in exchange for compliance. Wages have soared, but so has inequality. Now President Xi is calling on youth to shoulder bad debts and trade war costs. Their disaffection is as big a risk as revolution.

Pricey Japan is best game in town for U.S. casinos

4 June 2019

Operators like Las Vegas Sands and MGM have vowed to spend $10 bln each developing new resorts, and may pledge more. A tough rule book makes the country particularly attractive to Americans, given compliance risks in other emerging markets. But a bidding war will reduce returns.

Online tutor puts U.S. love of China IPOs to test

31 May 2019

Chinese companies have pitched themselves in New York as a bet on rising consumption, insulated from trade ructions. But poor performances of Luckin Coffee and others have tempered enthusiasm. That means even profitable ones like education upstart GSX may fail to make the grade.

Huawei’s EU friends will stay on the line for now

30 May 2019

BT and Vodafone paused sales of some of the Chinese group’s phones after America put it on a blacklist. Yet Huawei equipment still pervades European telecom networks. Ripping it out now would be costly and disruptive. Better to wait and see whether the U.S. pressure persists.

Uber and Lyft create Asian valuation conundrum

30 May 2019

U.S. ride-hailing exuberance faded into lacklustre market debuts. At the same time, Singapore’s $14 bln Grab, for example, recently raised capital privately at 7 times expected revenue, compared to Uber’s 5 times. Fast-growing payment units can only justify some of the gap.

U.S. watchdog should throw down Facebook gauntlet

29 May 2019

The FTC is working with the social network on a settlement for failing to protect user data, including a mooted fine of up to $5 bln. A lawsuit against Mark Zuckerberg’s firm might be a better option. It’s risky, but it could grab Facebook’s attention and change its behavior.

Chinese booze behemoth distills a sobering reality

24 May 2019

Kweichow Moutai’s state-owned parent may be planning to sell liquor directly through a separate unit. It could help usurp some $6 bln of value from shareholders, Breakingviews estimates. For new and growing MSCI index investors, it’s a stark reminder of China’s governance risks.

Viewsroom: America’s topsy-turvy regulators

23 May 2019

Qualcomm lost a lawsuit brought by one DC overseer, even as the DOJ intervened, while $26 bln T-Mobile US-Sprint merger is getting yanked around by agencies with opposing views. Doing business is hard when agencies no longer act in unison. Plus: Is Luckin Coffee going cold?

Cox: “China does it” is a bad antitrust argument

23 May 2019

Sheryl Sandberg says Facebook shouldn’t break up since its Middle Kingdom rivals never will. France and Germany pushed hard for an anti-competitive train merger because of a looming Chinese monopoly. Western values should guide competition law, not Beijing’s Communist Party.

Hadas: “Zero privacy” is both blessing and curse

22 May 2019

Back in 1999 a computer executive told people worried about disclosing personal data to “get over it”. They mostly have. Shared information is now too useful for regulation to restore lost innocence. For oppressive governments, meanwhile, individualised media is also valuable.