Regulation

FX market might benefit from statement of obvious

25 May 2017

New guidelines for the $5 trln-a-day currency trading market exhort participants to behave ethically and fairly. That will hardly deter miscreants. Still, the code has a good stab at clarifying grey areas and avoids creating exploitable loopholes. Best of all, it will evolve.

Hong Kong fights losing battle with property boom

22 May 2017

The territory is trying yet again to cool a red-hot real estate market. New curbs will make home loans less profitable for banks and increase down payments for borrowers. An acute land shortage and Chinese buyers' desire to diversify away from the yuan will limit the impact.

Review: Democrats’ chief firebrand fumbles message

19 May 2017

Elizabeth Warren's "This Fight is Our Fight" reads like a marker for a 2020 White House run. The senator from Massachusetts targets Donald Trump, lobbyists and Wall Street. Tales of struggling Americans are engagingly woven into the outrage. But her rote views limit her appeal.

Insurers take one step closer to intelligibility

18 May 2017

New accounting rules will force insurers to give a clearer picture of their liabilities. That should sweep aside national oddities, and stop firms using outdated assumptions that complicate comparisons. Yet while a step forward, aligning capital positions will remain a chore.

China’s confused market strategy reveals old flaws

17 May 2017

Top regulators rattled investors earlier this year with tough talk on financial risks. Now officials are trying to prop up stocks to provide a happy backdrop for showpiece political events. Even creating a proposed super-regulator cannot resolve such conflicting policy goals.

EU could spoil Uber’s cross-country road trip

12 May 2017

Travis Kalanick’s ride-hailing service can be regulated like any other transport firm, according to an EU legal opinion. That actually changes little – many member states already do. The big difference is that it would puncture Uber’s fantasy of European single-market protections.

Levy takes some sheen off Australian banks

10 May 2017

The government is slapping a 6 bps levy on big banks’ liabilities. The move will rake A$6.2 bln into federal coffers and shows bank-bashing is good politics, even in countries that weathered the financial crisis well. At least the sector is strong enough to absorb the hit.

Holding: SEC’s home-court edge nearing welcome end

4 May 2017

The U.S. regulator has been using in-house tribunals to run up the score against Wall Street targets. A rare loss last month and a new bill in Congress, however, may push more cases into federal court, where legal safeguards are stronger. Fairer hearings are worth giving up a few wins.

Make Britain’s Brexit bill performance-related

3 May 2017

The EU may demand 100 bln euros from the UK for leaving the bloc. Some Britons want to pay nothing. Investment bankers ease impasses between companies by making part of the cost contingent on future performance. Linking the bill to UK GDP might enable both sides to claim victory.

Hadas: Basic income is basically confused

3 May 2017

As new technology threatens job security, the dream of giving all citizens a simple payment is making a comeback. But the idea is too expensive to be practical. It also ignores the biggest drawback of modern welfare states: that lives are complicated and people are not angels.

EU clearing spat epitomises perils of hard Brexit

2 May 2017

Brussels may try to restrict euro-denominated clearing in the UK, a report says. European regulators have long fretted over the fact that most of it occurs outside the euro area. A compromise is more than possible – but is harder to achieve if Britain leaves the single market.

FCC puts dubious faith in U.S. broadband oligopoly

26 April 2017

New Chairman Ajit Pai wants to roll back rules that classify high-speed internet as a utility. He reasonably points to reduced investment following their implementation. A defanged regulator overseeing dominant providers of a crucial service, however, would be bad for customers.

Theresa May channels Margaret Thatcher in reverse

25 April 2017

The 1980s Conservative prime minister did unpopular things in the name of market forces, and wound up a middle-England hero. By pledging to cap fuel prices, her 2017 successor is being unashamedly interventionist. It’s hard to square with May’s vision of a “truly global Britain”.

Review: Lessons from ghosts of tax reform past

21 April 2017

Donald Trump wants to overhaul the U.S. tax code. “Showdown at Gucci Gulch” chronicled the last successful revamp 31 years ago. Its tales of lobbying and partisan battles seem quaint compared with today’s polarization and political spending. Still, the saga offers useful tips.

Markets back Dimon not Kashkari on too-big-to-fail

21 April 2017

JPMorgan's boss reckons banks are no longer irresolvable while the Minneapolis Fed president argues debt designed to absorb losses is flawed. One is putting too much confidence in the workout process and the other too little. Dimon has been more persuasive with bond investors.

How tech pushed finance into a status crisis

21 April 2017

Top programmers are outdoing dealmakers in pay, rivaling them in political clout and even stealing their reputation for hard graft. Cue hand-wringing from banks worried about retaining the brightest and best. They shouldn't worry: post-status industries make for better employers.

Deutsche offers investors a too-big-to-fail test

21 April 2017

The German lender’s latest U.S. regulatory thwack comes as it asks creditors to swap bail-in bonds for SEC-registered ones with clearer terms. It implicitly tests Berlin’s model for resolving banks. It’s also a reminder of the benefits Deutsche gets from being a global bank.

Trump finds one ex-Goldman banker he doesn’t love

20 April 2017

The White House wants to rein in the Financial Stability Board and its chairman, Bank of England Governor Mark Carney. U.S. officials question the international body’s authority to identify systemically important firms. It’s another step towards global regulatory fragmentation.

Huishan board implosion begs for director reform

19 April 2017

Mass resignations have left a troubled Hong Kong-listed firm without a working board. Independent directors were first to eject as problems mounted. Investors need more competent and reliable sentinels. Stronger minority representation could do the trick.

Holding: Cross-shareholding theories are overdone

18 April 2017

The latest antitrust fad says even the smallish stakes BlackRock and others own in multiple rivals can reduce competition. Studies arguing such holdings led to higher airfares sparked a U.S. investigation, but the evidence is weak. It looks like an answer in search of a question.