Smaller markets ripe for less Anglo-Saxon activism 15 May 2014 The threat of proxy fights or proposals to borrow heavily won’t sway the family or government owners common in emerging-market companies. While hedge fund Cartica’s fight with Chile’s CorpBanca may remain a rarity, there’s still money to be made from more consensual agitation.
FCC needs thick skin to weather its moment in sun 14 May 2014 The U.S. telecom watchdog is tackling flashy issues on mergers, net neutrality and wireless spectrum. Resolving them won’t be easy, given the agency’s mandate to spark competition while also promoting efficiency and consumer choice. Current commissioners seem up to the task.
Review: A crisis-like evaluation of "Stress Test" 12 May 2014 To judge the merits of Tim Geithner’s reflections, six Breakingviews columnists digested different pieces in a short amount of time. Like the regulators who often lacked broader context, the assessments vary. Yet there’s also consensus it’s a useful tome for the financial library.
Top U.S. patent court stuck in own tech bubble 12 May 2014 The tribunal’s focus on minutiae and IP owners can lead to head-scratchers like a copyright ruling for Oracle over Google. The Supreme Court may confuse iCloud with Dropbox, but its broader view allows it to get tech cases right. Even in law, expertise can’t replace common sense.
China’s central bank tames unruly internet finance 12 May 2014 Authorities are reining in the banking ambitions of the country’s web giants. News of potential curbs on online payments and funds has alarmed investors. But by providing some much-needed order in web finance, China’s central bank seems to be endorsing rather than killing it.
Clearers have yet to shake off TBTF menace 8 May 2014 Post-crisis reforms shifted the lion’s share of banks’ derivative risk to clearing firms. Critics say this has just moved too-big-to-fail threats to opaque, undercapitalised behemoths. Regulators and clearers have made good progress tackling the problem. But both could do more.
Regulators get in on the private equity joke 7 May 2014 After two-and-a-half years of poking around, the SEC has discovered the model lends itself to greedy behavior. For one thing, over half the firms the agency probed had abused expenses and fees. Given where the buyout business is headed, watchdogs could be kept plenty busy.
ECB easing would be better this month than next 5 May 2014 The central bank last eased policy half a year ago. It can always find excuses to prevaricate longer. The euro rally has paused, rises in short-term market rates have yet to lift longer ones, inflation is inching up. But the economy needs help, and the quicker the better.
Muzzling China’s money market mania 5 May 2014 Online funds that offer rates 15 times better than demand deposits are all the rage. By shifting savings around, they can help get finance to companies that need it. But if China doesn’t set clear rules to keep money market funds in check a helpful innovation could bring trouble.
Macquarie shows Wall St rivals a mirror image 2 May 2014 The Australian group’s full-year earnings rose 49 pct, fuelled by unfashionable businesses like commodity trading. Superior returns and fewer balance sheet woes justify Macquarie’s strong share price. But as the group expands overseas, it will get harder to buck the trend.
BNP is latest pawn in U.S. too-big-to-jail saga 30 Apr 2014 Post-HSBC, U.S. regulators are keen to bin the idea that big banks can’t be found guilty on stability grounds. BNP’s breaches of foreign sanctions may not be worse than peers’. But at best it looks to be facing a big fine; at worst, a serious threat to its Stateside business.
China’s bank exam ticks just one of three boxes 30 Apr 2014 As in Europe and the United States, the country’s central bank makes its largest lenders sit an annual stress test. But regulators don’t publish individual results, or spell out the consequences of failure. That’s why the inspection won’t do much for investor confidence.
U.S. bank watchdogs need more Washington love 29 Apr 2014 Regulators came out of the financial crisis shamed, but also with more power - and more work. Yet lawmakers are forcing more belt-tightening on them. Meanwhile, the Fed and the top swaps supervisor suffer from a dearth of leaders. Regulators need more resources, not fewer.
BofA reclaims banking dunce cap with $4 bln flub 28 Apr 2014 The Fed has told the U.S. mega-bank to suspend its dividend hike and buybacks after the bank found an error in its capital calculations. The discrepancy is small. But it dents any returning faith in banks’ risk management and puts boss Brian Moynihan back on the defensive.
FCC opts for net reality over neutrality 24 Apr 2014 The U.S. communications watchdog will allow charges for carrying content faster but keep the internet open to all. That means data hogs like Netflix pay extra and others still get access. It’s a way to protect consumers while bowing to the need for more broadband investment.
Coca-Cola deserves protest vote one way or another 22 Apr 2014 Several shareholders object to the $180 bln drinks giant’s equity pay plan. Some want the chairman and CEO jobs split. Nearly a quarter dissed top executives’ comp last year. With the stock underperforming, it’s no wonder investors are grouchy ahead of Wednesday’s annual meeting.
Regulatory dithering can cost the economy dearly 22 Apr 2014 The U.S. government’s continued deferral on the Keystone pipeline decision is a case in point. One year’s economic benefit from the project may be $1.8 bln; if the answer is no, the energy system can be optimized another way. Win or lose, regulators need to make up their minds.
Blackstone leaves a trail of money to follow 17 Apr 2014 The buyout firm generated record quarterly earnings, in stark contrast to Wall Street’s slog. It’s the latest sign of a power shift from banks to shadow banks, broadly defined. Having confined big lenders, watchdogs could pick up the scent on Steve Schwarzman and his ilk.
Europe’s banks lose their cover on leverage ratio 11 Apr 2014 European lenders used to defend their lowball equity-to-assets ratios by claiming U.S. rules were more lax. But new American proposals would use fundamentally the same methodology, with a higher pass mark. Tougher standards for EU banks are now much more likely.
UK investors wake up to asleep-at-the-wheel charge 11 Apr 2014 Disunity is one reason institutional shareholders look drowsy in the face of corporate excesses. Reforms to the way UK-based investors cooperate on governance could make them more alert by setting and enforcing clear standards. The risk is they default to cruise control.