Regulation

Beijing sours on private-sector independence

24 July 2017

Bureaucrats who once encouraged foreign takeovers are now second-guessing private deals by Dalian Wanda, HNA and others. Tech stars like Tencent are being force-fed shares in state dinosaurs. The Communist Party has grown overconfident in its ability to micro-manage.

GOP may get inside help to defang bank watchdog

20 July 2017

U.S. Republicans want to nix a key CFPB rule. Champions like Democratic Senator Elizabeth Warren will defend the consumer regulator created by the Dodd-Frank Act. But if Director Richard Cordray runs for Ohio governor, as seems plausible, the agency may soon wither away.

Morgan Stanley gives Goldman a lesson in diversity

19 July 2017

Stabilizing fixed-income trading isn’t the only way CEO James Gorman showed Lloyd Blankfein his tail for the second quarter in a row. His growing wealth unit helped, too. With the diversified firm firing on all cylinders, it is justifiably overtaking Goldman even on valuation.

Australian banks can digest capital hike move

19 July 2017

Regulators in Oz have aggressively hiked capital requirements for big banks. The caution is warranted given the finance sector's concentration and record household debt. A grace period will soften the blow for lenders, but outsized returns could be a thing of the past.

Guest view: Culture can’t be bank-reform casualty

18 July 2017

Moves to relax U.S., UK and European regulation and supervision necessitate still greater attention on the important issues of institutional conduct, argues William Rhodes, a former Citigroup executive and co-chair of the G30’s steering committee on bank culture and governance.

BofA’s progress fails to achieve escape velocity

18 July 2017

The $236 bln U.S. lender's $4.9 bln of Q2 profit beat estimates as retail, wealth management and investment banking all did the best in years. CEO Brian Moynihan is also keeping costs down. Yet return on equity is stuck in single digits. Only help from the Fed can change that.

Xi pours cold water on China’s “creativity” rally

18 July 2017

Investors, hearing President Xi call for a clampdown on financial risk, are speeding their exit from small caps and tech stocks into "old economy" blue chips. The bubble in the valuations for early-stage startups could be next to pop. That would not be a bad thing.

Wanda’s M&A punishment is too much, too late

17 July 2017

Chinese banks have been ordered to halt lending to entertainment and property giant Dalian Wanda, Reuters reported, in what looks like retroactive punishment for big foreign investments. Such blurry lines around what is and isn't allowed do Chinese outbound investment no good.

Amazon monopoly game will take forever to play out

14 July 2017

The e-commerce titan's Whole Foods deal has sparked fresh fears of its dominance. One hedgie says whispers of a possible congressional review prompted him to short the stock. How antitrust law applies, though, is unclear. For now, consumers and investors probably keep winning.

Citi, JPMorgan and Wells show reliance on D.C.

14 July 2017

Higher interest rates helped all three big U.S. lenders beat estimates. But so, to varying degrees, did one-offs, low tax rates and benign credit costs. Performance isn’t yet justifying their healthy trading multiples. That will require more Washington talk to become action.

Review: How justice lost its way on Wall Street

14 July 2017

The financial crisis had millions of victims but, unlike previous ones, no apparent perpetrators. Jesse Eisinger's "The Chickenshit Club" blames political timidity, lobbying and D.C.'s revolving door for the failure to prosecute top dogs. Investors may yet regret the change.

Murdoch’s Sky takeover can survive lengthy review

14 July 2017

The media mogul won’t offer more concessions to win quick approval for his 11.7 bln pound bid for the UK broadcaster. That will probably trigger an extended probe which investors think makes a deal less likely. But authorities can suggest remedies to clear the way for a deal.

Britain’s 5G auction puts customers before coffers

14 July 2017

Regulators capped incumbent BT’s participation in upcoming mobile-spectrum auctions. That may lead to less fevered bidding, and smaller takings with which to pay down the national debt. It’s a reasonable trade-off in order to ensure a competitive four-player telecoms market.

China finance powwow marks inflection point for Xi

14 July 2017

Officials gather today in Beijing for a major policy conclave. Challenges include high debt and poor agency coordination. President Xi Jinping is increasingly concerned about financial risk. The meeting offers a chance for the leader to refurbish his reform credentials.

Hong Kong’s regulator power grab is overdue

14 July 2017

The SFC will use little known rules to stop questionable listings after a spate of scandals. The bold move significantly undermines the stock exchange's role in approving IPOs and will complicate oversight in the short-term. Ultimately, the city needs a single strong regulator.

Sacred cows feed India’s flying chicken shares

14 July 2017

Hindu hardliners' campaign to protect cows helped shares of poultry specialist Venky's up around 440 pct this year without making the midcap pricey. Even with a reprieve on a cattle slaughter ban, chicken will remain in demand as the top protein source for a rising middle class.

Aramco exemption bends London IPO rules to limit

13 July 2017

The UK regulator wants to change its listing regime to lure state-controlled groups like the Saudi oil giant. The watchdog has to keep markets clean while protecting London’s competitiveness. But making policy for a single company - especially one as big as Aramco - is a mistake.

Why Europe can’t beat Google on corporate taxes

13 July 2017

A court has ruled the search giant is not liable for French back-tax after all. Google will face other battles over how it arranges its profits. Tech companies will always have an advantage, though. Unlike competing European countries, they can put their global interest first.

RBS path to normality gets a little shorter

12 July 2017

The UK bank will pay $5.5 bln to settle allegations it mis-sold mortgage-backed bonds, not too out of whack with rivals’ deals. RBS still has a long list of legacy issues to resolve, but the risk is becoming background noise. Boss Ross McEwan is a step closer to paying dividends.

Amec probe pollutes tricky oil merger

12 July 2017

John Wood Group shares fell more than 6 percent after the company it is taking over, Amec Foster Wheeler, said it was under investigation for possible bribery. The probe was a known risk, but the bad timing, combined with a low oil price, makes the 2.2 bln pound deal look rash.