Regulation

Bank dividend bans have passed their sell-by date

30 October 2020

European supervisors in March halted payouts so that lenders could keep credit flowing and absorb losses. Yet earnings and capital have held up, while bond markets are booming. Regulators can drop the restrictions, as long as banks keep big shock absorbers and don’t cut lending.

Four-year deal delay dims the romance of M&A

23 October 2020

China Oceanwide’s $2.7 bln takeover of Genworth has been postponed for the 16th time since it was unveiled in October 2016. Blame politics and the pandemic for the wait. Mergers that take this long to consummate make it hard to recall the benefits they were meant to provide.

Goldman’s clawback is small but pointy

22 October 2020

CEO David Solomon and others will forfeit $174 mln of bonus payments to resolve the 1MDB bribery scandal. But there’s a question mark over former COO Gary Cohn, who cashed in when he went into politics in 2017. That career change shouldn't shield anyone from past sins.

Corona Capital: U.S. tests, UK loans, Man U groans

21 October 2020

Concise views on the pandemic’s corporate and financial fallout: Abbott Laboratories has a bumper third quarter; UK banks look at a workaround for their Covid-19 loan problem; and Manchester United reveals a predictably ropey set of annual results.

Google exhausts search for antitrust tolerance

20 October 2020

The U.S. Justice Department sued the Alphabet unit, slamming its dominance in online search. A prolonged fight may spill over into a Joe Biden presidency if he wins in November. The last Democratic administration gave Google a pass. The kid glove treatment won’t be repeated.

Budding UK cannabis listings will end up stunted

16 October 2020

Britain’s watchdog has opened the door for medicinal marijuana companies to be listed in London. Success stories may, however, end up following GW Pharmaceuticals, which in 2016 opted to list solely in New York after more than a decade of seeing its share price stagnate.

Australia’s Crown trapped inside its gilded cage

15 October 2020

The $4 bln casino empire is facing intense regulatory scrutiny for allegedly dodgy dealings involving Chinese high-rollers. It puts a new resort licence in jeopardy. Billionaire James Packer also has conceded the ownership structure may need changing, but it could be a hard sell.

Big Tech broadside is bonanza for D.C. lobbyists

7 October 2020

A U.S. Congress report accuses Amazon, Apple, Facebook and Google of abusing market power. Trustbusting recommendations include breakups and a merger ban. Any actual reforms will surely be heavily diluted, but the four giants now have a 450-page guide for their counterattacks.

NTT’s $40 bln Docomo bid dials up Japan deal costs

29 September 2020

The mobile operator’s parent is buying out minority shareholders at a 41% premium. Japan’s new leader Yoshihide Suga wants to lower telecoms tariffs to help consumers; other carriers’ shares fell on news of the deal. The generous offer looks hard to justify.

India will win by playing tax cricket

28 September 2020

By accepting the international arbitration ruling in Vodafone’s favour, India can shake off its reputation for “tax terrorism” as it seeks to woo investment away from China. Resolution will bring long-term investment gains even if defeat entails painful upfront costs.

Ant IPO offers rose-tinted view of Chinese finance

28 September 2020

Alibaba’s payments offshoot has grown into a $200 bln-plus digital middleman for loans, funds and insurance. That’s allowed it to avoid the dodgy credit and opaque transactions which weigh down China’s financial system. New investors are betting regulators will let that continue.

Apple fight is just one front in Europe’s tax war

25 September 2020

Antitrust tsar Margrethe Vestager will appeal a court ruling nullifying demands the tech giant pay Ireland $15 bln of back taxes. It’s time-consuming and possibly futile. With Covid-19 inflating government deficits, political pressure on low-tax states may be more fruitful.

How to build a European JPMorgan

25 September 2020

An EU bank of the U.S. behemoth’s size could help ensure reliable corporate funding and more tech investment. Fragmented liquidity, capital and bankruptcy rules make the necessary mega-deals hard. Though the ECB is helping, it’s really up to national regulators and politicians.

Evergrande’s too-big-to-fail bind comes to a head

25 September 2020

The indebted Chinese property developer beseeched officials to approve its reverse merger plan. Although the company claims the letter is fake, the questions in it regarding systemic risk are real for investors and Beijing. A $21 bln payment due soon will force a reckoning.

Giant Ant frustrates Hong Kong dollar bears

24 September 2020

Appetite for the fintech titan’s mega-IPO has strengthened the currency and triggered intervention. Inflows to bid for and buy shares could exceed $100 bln. The city can handle the volume, but a long line of stock sales creates fresh headaches for doomsayers like hedgie Kyle Bass.

UK insurers’ regulatory bruises will heal quickly

22 September 2020

Direct Line and RSA shares fell after Britain’s Financial Conduct Authority proposed that existing customers shouldn’t pay higher rates than new ones. Spiking Covid-19 claims are hitting the sector too. But with the FCA pain evenly shared, the move may actually help margins.

Money-laundering fight starts with transparency

21 September 2020

Bank shares fell after leaks suggested lenders moved allegedly dodgy funds despite red flags. They will keep doing so if they can plead ignorance about where cash ultimately comes from and ends up. Better visibility on company ownership, and cross-border data sharing, will help.

China sounds keen to tame financial giants

18 September 2020

The central bank’s new rules to curb reckless sprawl and systemic risk are ready to roll. Designed to stop another Tomorrow-like debacle, they may force influential conglomerates such as CITIC and state-owned groups to restructure. The trick will be for Beijing to stay vigilant.

Rio Tinto gets bad recruitment steer from Canberra

15 September 2020

Australia’s treasurer wants the miner’s next CEO to be Australian, after Frenchman J-S Jacques stepped down over the destruction of an Aboriginal site. Cultural sensitivity is a priority, but the goal can be achieved in other ways. Shareholders deserve the best boss Rio can find.

Buyout baron special pleading faces uphill battle

9 September 2020

A UK review of capital gains taxes may close the infamous carried interest loophole. Private equity’s threats to move abroad have less force since others, like U.S. presidential candidate Joe Biden, are also hostile. The industry’s growing heft makes it a bigger global target.