Regulation

Trouble in Paradise highlights U.S. coal’s dilemma

15 February 2019

The Kentucky power plant is one of two being closed because the fuel is no longer economical. Struggling supplier Murray Energy, run by a big Trump supporter, reckons overseas markets are its salvation. But they are unlikely to come to the rescue of the American industry.

Viewsroom: Down Under’s upheaval

14 February 2019

Falling house prices and slowing Chinese growth are putting Australia’s record of almost 28 years of economic expansion at risk. The banking industry got dinged after a gripping year-long investigation. And a change of government looks likely. Breakingviews dives into the issues.

U.S. mortgage fix is hostage to 2020 election

14 February 2019

Trump officials have hinted they may bypass Congress to overhaul Fannie Mae and Freddie Mac. The giant housing-finance firms’ proposed new overseer is certainly no fan. Reform is long overdue. But messing with Americans’ mortgages as a presidential vote looms is risky.

Hadas: Four principles for regulating the internet

14 February 2019

The web needs watchdogs, and they need guidelines. Make internet operations a privilege, not a right. Replace neutrality with a duty of care. Keep big data within strict limits. Provide ample honest information. These ideas will make the internet less profitable, but much better.

Foreign IPO tide flows back into Hong Kong

14 February 2019

Global Switch and Home Credit are eyeing $1 bln floats in a city which has struggled to attract interest offshore. AB InBev might list its Asia operations too. Rule changes letting the benchmark index include overseas-based firms are one incentive. A thin China pipeline is another.

Cannabis brings out mellow side of U.S. politics

13 February 2019

It’s one of the few issues on which most Americans agree, and a revived proposal to let banks serve state-sanctioned marijuana producers has a chance of becoming law. Fully legal weed remains a long way off – but that is something few in the industry actually want.

Holding: SEC stays classy on class-action lawsuits

13 February 2019

The U.S. watchdog allowed Johnson & Johnson to block a proposal to ban shareholders from suing en masse. The move preserves an essential check on corporate fraud – for now. Rising litigation and Supreme Court hostility to securities cases may soon force the regulator to yield.

EU risks picking wrong fight with foreign giants

13 February 2019

France and Germany want to help companies fend off Chinese and U.S. behemoths by merging. Yet Europe’s fragmented markets and limited state subsidies mean it will never win the size game. Better to double down on strict antitrust rules while blocking unfair foreign buyers.

Pinduoduo’s bid for calm has its limits

12 February 2019

Even by Chinese tech company standards, the $31 bln e-commerce outfit has had a volatile start to public life. A $1 bln follow-on will up the float and help to ease wild price swings. But ballooning losses, competition with Alibaba, and legal woes will continue to create a stir.

China could pay dearly for winning the 5G race

12 February 2019

The U.S. Secretary of State is in Europe lobbying politicians to ditch Huawei network products. Beijing is spending $400 bln trying to gain an edge in the next- generation telecoms, benefitting local champions. But if exports get stymied, China could be stuck with a hefty bill.

Artificial intelligence push lacks intelligence

11 February 2019

A U.S. plan to add oomph to AI research reflects anxiety about Chinese advances, and may give firms confidence to invest in smart systems. But it’s mostly symbolic without funding on basic research and openness to foreign talent. That jars with President Trump’s other priorities.

Viewsroom: U.S. water crisis may evaporate wealth

7 February 2019

Overuse and climate change are sapping the Colorado river, source of a fifth of U.S. GDP and at least $1.3 trln of market value. The feds and basin states are struggling to adapt, but investors pay little heed. Plus, can India Prime Minister Modi’s budget help him win re-election?

U.S. Green New Deal is at least a big idea

7 February 2019

The progressive Democrat plan envisages sweeping measures to combat climate change and a raft of social ills. It’s vague, flawed and hotly opposed by Republicans. But backer Alexandria Ocasio-Cortez has a knack for getting noticed – and a serious environmental debate is overdue.

Market ignores Colorado river crisis at its peril

7 February 2019

The waterway supports at least $4 trln in GDP and $1.3 trln in stock value across seven U.S. states. Declining flows are worsened by rising temperatures, and screwy governance makes basin-wide planning hard. Now the feds are stepping in. Yet investors have barely caused a ripple.

Derailed train M&A spells poor EU antitrust revamp

6 February 2019

Competition tsar Margrethe Vestager blocked Siemens and Alstom’s rail merger in defiance of Franco-German pressure. Paris and Berlin are agitating for rule changes and may back a replacement who will be more willing to create regional champions. That would be a mistake.

Italy’s new top watchdog fails market test

6 February 2019

The government has nominated eurosceptic economist Paolo Savona as head of the markets regulator, an apparent demotion from his current ministerial job. Consob’s structure and EU rules limit his room for manoeuvre. Even so, the weakened body deserves a more independent boss.

Australian bank review has a soft bite

4 February 2019

After almost a year of painful testimonies which helped wipe some $40 bln off the value of the big four banks, a landmark report into financial services recommends oversight of regulators, an overhaul of mortgage broking and of fees paid for advice. It could have been worse.

China cigarette IPO offers unfiltered Beijing bet

4 February 2019

The overseas arm of China Tobacco will list in Hong Kong. Sales abroad are growing. But most of its revenue comes from importing leaves for its parent, a monopoly in a country where 300 million people light up. That's a lot of risky exposure to dated anti-smoking policies.

Metro Bank shoots itself in the other foot

31 January 2019

The UK challenger lender has admitted that regulators, not the group itself, found recently revealed accounting fudges. What was dubbed as an oversight now looks even worse. That’s a lamentable look for a bank that may well need to raise capital later this year.

Cox: Cannabis and impeachment on readers’ minds

28 January 2019

When asked which investment would outperform in 2019, participants at our Predictions events around the world chose Canadian weed stocks most over other assets. Most also put the chance of Congress impeaching Trump at 30 pct or higher. Consider some other surprising results.