Diagnosis of economic malaise lacks credible cure 30 Jun 2014 Global growth is feeble and financial markets are piling up risks, says the Bank for International Settlements. Yet its proposed remedies of tighter monetary policy and structural reform are unconvincing. Like everyone else, central banks are still seeking the right medicine.
Wall Street’s good-bad cops turn up heat on banks 27 Jun 2014 The OCC is warning again of risky lending that the Fed has in part fueled with low interest rates. The regulatory clash, and some of the OCC’s edicts, may look confusing. But it’s encouraging to see watchdogs keeping a closer eye on risk and putting lenders on the spot.
America oil export boost barely scratches surface 25 Jun 2014 The Obama administration is relaxing a decades-long ban on selling black gold abroad. But the move only affects ultra-light crude, a sliver of U.S. output. Allowing sales overseas of all oil would narrow the trade deficit and foster jobs. That, though, requires Congress to act.
Aereo is dead, long live TV disruption 25 Jun 2014 The U.S. Supreme Court says the Barry Diller-backed streaming startup violates copyright law. Legal loopholes abound, however, and investors and viewers will reward those who find ways to exploit them. The likes of CBS and Disney can’t afford to spend much time celebrating.
Aggrieved investors win by efficient market fail 23 Jun 2014 Halliburton and others can block group stock-fraud cases by showing a lie didn’t hurt prices, the U.S. Supreme Court ruled. That defies assumptions about how share value reflects public information and will curb some stockholder suits. Stronger cases, though, should deter deceit.
China audit scrapes at rust in SOE engine 23 Jun 2014 Understated earnings, overstated assets, secretly built golf courses – a new audit shows a litany of accounting problems at big state-owned enterprises. This low-level rule-bending is less eye-catching than high-level corruption, but it’s a no less pernicious drain on growth.
Review: ‘Leftover Women’ may hinder China’s growth 20 Jun 2014 Women’s rights have suffered from China’s fixation on social harmony, says Leta Hong Fincher in a new book. She exposes an injustice, but that’s not enough to force change. What might is the threat of a slowing economy.
Supremes ride shotgun with Tesla down open road 19 Jun 2014 The top U.S. court unanimously ruled that abstract ideas even if run through a computer can be freely adapted. Elon Musk’s electric carmaker also just opened up its technology. Both decisions spread an important message to the vicious world of patent fighting: share, don’t hoard.
Hong Kong’s IPO debate risks missing the point 19 Jun 2014 A government-backed body has weighed in with proposals to make the city more appealing to new listings. But it failed to take a stand on whether to relax the rule of “one share, one vote”. Following Alibaba’s defection to the U.S., regulators need to tackle the issue head on.
Blunt instrument is needed for global house bubble 16 Jun 2014 The IMF is worried about the risk of a global house price bubble. Housing markets may be regional, but low supply and excess demand are common worldwide. Macroprudential tools and construction are part of the response. But anything other than an end to cheap money is tinkering.
Carney uses markets as cover for volte-face 13 Jun 2014 It’s a bit rich for the BoE chief to say rates may rise sooner than markets expect. Until now, he has guided investors the other way. The U-turn shows the danger of pseudo-transparency. Still, there’s welcome honesty that the blunt instrument of a rate hike may be needed.
Austria’s piecemeal bail-in is least-bad outcome 13 Jun 2014 Vienna is to force losses on Hypo Alpe Adria’s junior bondholders, even though the debt is guaranteed by regional government. States shouldn’t make a habit of writing laws to cover past mistakes. The result is fair, but the precedent is bad.
Forex is weakest link in UK market abuse crackdown 12 Jun 2014 Chancellor George Osborne is attacking manipulation of currencies, interest rates, and other assets. Wrongdoers face jail. The moves are sensible and other EU countries plan something similar. But there’s a big problem: still no global rules to tell FX traders what is acceptable.
BNP’s chief operating officer retires. Next? 12 Jun 2014 The French bank’s long-serving COO is leaving earlier than planned. New York regulators are said to have wanted this as part of a multibillion-dollar settlement for sanctions violations. BNP doesn’t draw a link. The question of who takes responsibility for the mess remains open.
EU shows tax dodging is a government business 12 Jun 2014 Brussels will probe three member states for their favourable tax rulings on multinationals. It alleges the decisions might have amounted to illegal state aid. That is a clever way to clamp down on tax evasion – by acknowledging that governments are aiding and abetting.
Edward Hadas: Market failure can be sign of fatigue 11 Jun 2014 Sometimes money makes the difference in healthcare, but sometimes ideas matter more. Take chronic fatigue syndrome. The market hasn’t delivered treatments for this condition in spite of obvious financial potential. Worn-out medical ideology is more to blame than flawed economics.
A London roadmap for regulating $18 bln Uber 10 Jun 2014 Cabbies are to protest in the UK capital. The online cab firm’s fresh valuation shows how much may be at stake. But Uber’s lower fares are welcome, and black cabs have other privileges. London has a chance to balance Uber’s consumer benefits and its disruptive impact.
BNP’s dollar clearing capability is non-negotiable 6 Jun 2014 The French bank’s impending penalty for alleged U.S. sanctions-breaking could include a temporary ban on clearing payments through New York. Such business appears to be less than 5 pct of revenue. But its value to BNP Paribas’ wider operations and growth strategy is far greater.
Flash boys get a belated dressing down from SEC 5 Jun 2014 The U.S. watchdog’s plan to scrutinize high-frequency dealing lacks detail, but more trader and dark-pool oversight seems a no-brainer. The point is that the markets are set for a major review as investor faith erodes. Making them simpler and more stable would be a worthy goal.
Wall Street watchdogs keep barking up wrong trees 5 Jun 2014 Blown trials and an iffy probe of Carl Icahn are coming back to bite U.S. regulators. Fuzzy insider trading laws are one problem, but a weakness for big names and stale cases has also led enforcers astray. They might have more luck chasing down abuses like accounting fraud.