Congress not courts should cure Obamacare’s ills 21 Jun 2013 The U.S. healthcare act doesn’t need major surgery as it rolls toward full implementation, but it could do with some nips and tucks. Judges are hearing dozens of cases like this week’s test of certain tax credits. Such policy issues, however, are better handled by lawmakers.
Home equity help is better route to U.S. ownership 21 Jun 2013 The Federal Housing Administration is in a $16 bln hole thanks to a failed model of encouraging home-buying by allowing tiny down payments. A new proposal to match buyers’ savings to create a bigger slug of equity looks like a less risky way to subsidize the American Dream.
China credit squeeze challenges “age of ambiguity” 21 Jun 2013 Imprecision has been good policy for China. The belief that deposits are guaranteed, and that banks can’t fail, has underpinned the last decade of rapid growth. A financial crisis, though, calls for facts and plans - otherwise rumours and half-truths can wreak havoc.
Lending squeeze tests faith in China’s authorities 20 Jun 2013 A spike in interbank rates has raised fears of a 2008-style meltdown. China’s closed and state-controlled financial system has a better chance of averting a crisis. But policymakers can make mistakes. The lack of transparency means even a small slip could undermine confidence.
Brazil’s new-look resource nationalism still hurts 19 Jun 2013 A long-awaited mining bill reflects weakening commodities prices. Instead of a windfall tax, royalties may double. The market expected worse, but a levy on mine revenue rather than profit will still make future projects less viable. The new law could dent investment – and Vale.
UK banking report pulls more punches than it lands 18 Jun 2013 The long-awaited parliamentary report on UK banks is underwhelming. A “Fred Goodwin” law that could put the reckless in prison is a bold idea. A call for an inquiry into banking competition is right but hardly novel. Ultimately, the work is long on words and short on deeds.
Bank leverage spat shows the limits of simplicity 18 Jun 2013 A U.S. regulator says Deutsche Bank is “horribly undercapitalised” with assets worth 61 times equity last year. The group insists leverage was less than half that. Both are right, but use different numbers. The drive to simplify regulations is clouded by accounting complexity.
Unchecked rate surge could threaten China’s growth 17 Jun 2013 Soaring interbank rates should be a fitting punishment for lenders which lent too freely and unwisely. But if allowed to persist, the pain could spread beyond banks to corporate and government borrowers - and the economy. It is unlikely China’s leaders have the stomach for that.
Singapore’s creative bank penalty may be a one-off 17 Jun 2013 The city-state is forcing lenders to set aside up to $9.6 bln in extra reserves as punishment for rate-rigging offences. With rates low, the costs will be smaller than recent mega-fines. And proposed new rules mean future misbehaviour will be met with more conventional justice.
Book review: Nazis, secrecy and central banking 14 Jun 2013 The Bank for International Settlements is a taxpayer-funded institution that controls global finance. Yet its history, including its links to the Nazis, is less than encouraging, says Adam LeBor in Tower of Basel. His thrilling exposé reveals another of finance’s blind spots.
U.S. justices square the helix on gene patents 13 Jun 2013 The Supreme Court ruled that companies can hold exclusive rights to synthetic human genes, but not naturally occurring ones. That allows biotech businesses to reap rewards for their work without stifling the research of others. The decision serves science, industry and the law.
U.S. mortgage plan may offer best of bad options 13 Jun 2013 A bipartisan Senate proposal finally phases out Fannie and Freddie, but only tweaks the flawed government-backed home finance system. It may even hand a few hedge funds a profit. Sadly, more radical options have faded with time. It’s now about what’s politically possible.
China IPO revamp chooses lesser of two evils 13 Jun 2013 New measures, such as barring insiders from selling shares below the issue price, will encourage companies to price IPOs low. The worry is investors may take it as a guarantee that new stocks will always go up. But only drastic action can restore faith in China’s equity markets.
New York watchdog protests too much over insurance 12 Jun 2013 The state’s brash financial regulator rubbed fellow overseers the wrong way over Standard Chartered. Now he risks doing the same for insurers. His capital-inflation beefs are legitimate, but other U.S. regulators are on the case. What’s needed is coordination, not a vigilante.
U.S. defense on Big Data as murky as industry’s 6 Jun 2013 The Obama administration argues the NSA’s secret collection of Verizon phone records doesn’t compromise privacy and is good for the country. Wall Street and Silicon Valley often make similar claims. History suggests it often ends up being good for those controlling the data.
Apple patent case exposes trade arbiter’s flaws 5 Jun 2013 A ban on U.S. imports of older iPhones is a big win for rival Samsung — and yet another example of the International Trade Commission being too quick to block products on dubious grounds. President Obama plans to tighten ITC standards. He could start by nixing the Apple ruling.
New SEC chairman makes headway over predecessor 5 Jun 2013 Mary Jo White is pushing ahead on money market reforms, a challenge that Mary Schapiro was forced to punt to other U.S. agencies. The move gives White some credibility in Washington – something she’ll need if she wants to focus on nabbing Wall Street’s real miscreants.
Congress can foster innovation by hunting trolls 4 Jun 2013 Intellectual property suits by rent-seeking patent holders are rising. Many of these cases are wasteful and discourage invention. Courts have reined in some abuses. And Obama wants to make it harder to hide behind shell companies. It’s time for legislators to play their part.
New U.S. systemic tags better late than never 4 Jun 2013 AIG and GE Capital are among the non-bank firms designated systemically risky by the financial stability uber-regulator. These are no-brainers for the SIFI moniker. Trouble is, five years on watchdogs are still bogged down in the last crisis rather than looking out for the next.
New SARS-like virus tests plague of patent trolls 31 May 2013 A deadly affliction first found in Saudi Arabia has led to squabbles over whether the quest for IP rights has impeded discovery and treatments. The case stretches the law far beyond the smartphone wars. When the stakes are this high, though, greed often plays a lesser role.