Verizon taps out unwise riposte to new web rules 26 Feb 2015 Regulators are giving consumers a boost by preventing broadband providers from offering favorable treatment to certain clients. But the telecoms giant expressed its discontent in Morse code and then in old typeset. Disagreeing is fine. Taunting your overseer, though, is a risky move.
Fed critics confuse independence with lack of bias 25 Feb 2015 U.S. lawmakers accused central bank Chair Janet Yellen of playing political favorites. Revealing more about her meetings wouldn’t hurt. But Fed officials favor different economic models that may reflect party divisions. That doesn’t mean they aren’t making their own decisions.
Vague Yellen more likely to surprise than soothe 24 Feb 2015 The Fed chair deftly parried conflicting calls for more patience and higher interest rates in congressional testimony on Tuesday. What she didn’t do is offer clarity on the timing of a rate hike. The strategy may calm markets now but ensures everyone will be caught off guard.
Wall Street’s broker fight is another losing cause 23 Feb 2015 The White House is pushing new rules for agents and retirement advisers that the industry says will hurt investors and curb fees. Added duties are sensible, however. The clarity is probably worth the price and fledgling online startups should pick up some of the customer slack.
EU capital markets union is still just a slogan 23 Feb 2015 For non-bank finance to flow, the single market needs cross-border insolvency laws and tax incentives for investment in SMEs. Securitisation cheerleading aside, these key barriers have yet to be tackled. They will have to be if capital markets union is to get off the ground.
Hugo Dixon: Time for Alexis Tsipras to keep his nerve 21 Feb 2015 The new Greek PM has crossed a Rubicon in asking for an extension to the country’s hated bailout programme while abandoning many election promises. Tsipras should realise there is no turning back. But he can snatch victory from defeat if he embraces radical reforms with vigour.
Trustbusters cook up simpler way to fry food deal 20 Feb 2015 The FTC need only raise “serious” questions to thwart Sysco’s $3.5 bln US Foods purchase. It’s an unusually low hurdle that has helped stall mergers like Whole Foods and Wild Oats. A bill that would change the rule may not pass in time to keep Sysco’s from going up in smoke.
Amex antitrust loss puts 1 pct solution in doubt 19 Feb 2015 The credit card firm may lose luster with all-important high earners after a ruling allowing stores to tout the virtues of cheaper rivals. Amex may be able to stave off some of the impact. But a big cut in swipe fees would hurt its rewards programs – a draw for the wealthy.
Barclays dark pool gadfly mixes sharks and minnows 19 Feb 2015 The NY attorney general claims the UK bank’s equity e-traders misled savvy investors. It’s the same line that weakened suits over dodgy mortgages. The judge is right to be skeptical. Banks should be held accountable, but big fish bear responsibility for their own boneheaded bets.
UK competition probe could hinder universal banks 19 Feb 2015 The financial watchdog will assess whether broker-dealers with corporate banking arms have advantages over narrower rivals. The big players already face a host of regulatory challenges. If this review has teeth, smaller players may get more of the $15 bln in annual UK revenues.
Wal-Mart’s gun sales are shareholders’ business 9 Feb 2015 The retailer slams a Wall Street church’s demand for an arms-peddling policy as overly meddlesome. It’s just another attempt to keep investor ideas off proxy ballots. Proposals can be wacky, but ones raising serious issues deserve a vote. Regulators need to define the difference.
SEC gets tough on auditors and soft on China 9 Feb 2015 Accounting firms will find it harder to keep paperwork on suspected Chinese fraudsters from the U.S. watchdog. Those that don’t try to help could face temporary bans. Yet the new approach leaves China plenty of scope to nix investigations. Investors are only a little better off.
Prudential makes a drama out of capital surprise 6 Feb 2015 Investors wiped $2 bln off the U.S. insurer’s value after it reported a baffling Q4 drop in excess capital. The company’s belated explanation eventually helped the shares recover. But the episode suggests a failure to manage expectations that SIFIs like Prudential can ill afford.
Anthem investors don’t get cyber risks, either 5 Feb 2015 Data breaches at the likes of Target, Home Depot and Sony have put once-complacent managers on notice. But the small impact on the stock of the $37 bln No. 2 U.S. healthcare group after up to 80 mln records were compromised suggests shareholders are still not alert to the danger.
Staples-Office Depot can pass antitrust checkout 4 Feb 2015 Crunching together the two U.S. office supply chains is a financial winner: the value of the synergies alone pays for the $6.3 bln deal. Though trustbusters may squawk, even they acknowledge that with internet and big box stores thriving, the competitive landscape has changed.
S&P’s $1.4 bln deal reawakens watchdogs’ dilemma 3 Feb 2015 The credit rater isn’t admitting to any illegality, but at more than half of 2013 revenue the settlement is painful. If Uncle Sam really thinks S&P defrauded bondholders, it’s crazy to regulate raters more tightly - investors are more likely to be taken in by any shenanigans.
U.S. insider trading cops risk pasting from bench 29 Jan 2015 Prosecutors’ aggressive view of the law has already irked appeals judges, and the Supreme Court may be next. A case on the definition of an illegal tip could give Justice Scalia his long-sought chance to rein in Wall Street watchdogs. Their loss would be a win for clearer rules.
Alibaba gives crash course on government relations 29 Jan 2015 The e-commerce group’s shares fell after a Chinese regulator lambasted its sales habits. Alibaba must convince investors it was blindsided, and prevent its beef with the watchdog escalating. It’s an insight into how contradictory and value-destructive the Chinese state can be.
Credit crackdown exposes flimsiness of China rally 19 Jan 2015 Mainland stocks dropped 5 pct after regulators temporarily banned three brokers from opening new margin-trading accounts. The controls may cool rather than kill Chinese investors’ new enthusiasm for shares. But it’s a reminder how much the market mania depends on borrowed money.
MetLife SIFI suit is risk for harried watchdogs 14 Jan 2015 U.S. courts have squelched a slew of securities and commodities rules. Systemic tags may be next as the insurer challenges its big-and-risky designation. Activist judges are often blamed, but sloppy, rushed regulators are likelier culprits. More watertight rulemaking is in order.