India’s market regulator needs to get tougher 25 May 2012 SEBI is considering removing the option to settle serious cases like insider dealing without admitting guilt. That could lead to even less enforcement than at present. But if it hardens SEBI’s resolve to land a high-profile conviction, such self-denying ordnance may be worth it.
JPMorgan hits Washington’s reset button 22 May 2012 U.S. senators who oversee the banking sector slammed regulators on Tuesday for apparent lapses related to JPMorgan’s trading losses. Other Dodd-Frank tweaks that had been moving along are grinding to a halt. Glimmers of hope for clear bank rules look all but squashed for now.
Risk of testifying could pay off for Raj Gupta 18 May 2012 The smart money says the former McKinsey boss and Goldman Sachs director won’t take the stand at his insider trading trial. But the prosecution’s case is circumstantial, leaving him room to explain. With the public lusting for a boardroom scalp, this is no time to play it safe.
Facebook tax witch hunt looks in wrong place 17 May 2012 Two U.S. senators object to co-founder Eduardo Saverin’s tax “duck” on his stake in the social network now that he has given up U.S. citizenship. But becoming a non-American is expensive and complicated. Lawmakers might ask what they’re doing wrong for expats even to consider it.
Murky U.S. bribery law gets a dose of clarity 14 May 2012 Morgan Stanley recently showed how to avoid legal charges, and an appeals court will soon define whose palm can’t be greased. That’s good news for multinationals sweating unpredictable enforcement of a very confusing statute. But an overhaul by Congress is still long overdue.
Dodd-Frank opponents return to the drawing board 14 May 2012 JPMorgan’s prop-like $2 bln trading flub gives ammo to proponents of more stringent bank oversight. Yet Mitt Romney and many in the GOP have promised to gut Dodd-Frank and Volcker. One tactic may be to embrace Dallas Fed President Richard Fisher’s call to make banks smaller.
JPMorgan hammers another nail in VaR coffin 14 May 2012 The U.S. bank’s $2 bln loss has again highlighted the flaws of using Value-at-Risk to gauge trading exposures. That will help regulators ditch the measure. The bigger challenge, however, will be making capital rules less dependent on figures produced by banks’ computer models.
Judges can be tough without getting personal 9 May 2012 Few can chill U.S. business spines faster than Delaware’s Leo Strine. He honors a tradition of tart lectures from the state’s bench. But his scolding of Martin Marietta and its spin doctors, though on target, sounded catty. Too much of that and he could leave his audience cold.
U.S. Treasury starts thinking like a company 2 May 2012 The nation’s borrower may sell floating-rate debt. That’s a smart idea. It could provide medium-term funding security without adding much interest-rate risk. But Treasury needs to tread carefully. And without Congress slashing the deficit, it leaves credit risk unaddressed.
How to succeed in business without really bribing 30 Apr 2012 That’s not the title of a new Broadway musical but a vexing question for multinationals trying to expand abroad without running afoul of the U.S. Foreign Corrupt Practices Act. Without any judicial interpretation, the law has become muddled. A revamp looks to be in order.
Hugo Dixon: Does Europe need a banking union? 30 Apr 2012 A centralised system of supervision and bailouts is increasingly viewed as necessary to break the link between troubled lenders and their equally troubled governments. This is neither necessary nor likely. But a more limited solution may be feasible.
Unipol probe may further muzzle Italy powerbrokers 27 Apr 2012 The Italian antitrust agency has halted bidding for Fondiaria, the country’s second largest insurer. Blocking a currently favoured bid from Unipol would be good news for minority investors. But coupled with new boardroom curbs, it could also strike another blow for corporate reform.
Can hedge funds help save the GOP from itself? 25 Apr 2012 These big money backers of Mitt Romney have also been leading the charge to legalize gay marriage. Although their social liberalism may turn off the Republican base, it could also bring in swing voters who agree with the party on fiscal policy but not its cultural conservatism.
TARP success doesn’t make it good finance 25 Apr 2012 The government’s $700 bln bailout plan stabilized the U.S. banking system and carmakers, but taxpayers won’t see any direct returns from the investment. Treasury’s fuzzy math wouldn’t fly with any sensible portfolio manager. What it calls a profit looks more like a $230 bln loss.
Watchdogs adopt smart pragmatism on swaps trading 18 Apr 2012 The SEC and CFTC are whacking up the volume threshold for being dubbed a dealer to $8 bln. That 80-fold increase might seem like they’re caving to industry pressure. But it’s a more realistic level that will let the market function while still ensnaring the market’s big players.
Bank dominoes need to be better spaced 17 Apr 2012 Many were in danger of toppling after Bear and Lehman fell. Limiting their exposure to a single counterparty, as Dodd-Frank does, should help prevent another similar chain reaction. Big banks may not like it but this too-interconnected-to-fail measure is worth implementing.
Obama’s oil speculation plan is mercifully mild 17 Apr 2012 Under fire for high gas prices, the U.S. president has executed a masterful trade. Giving regulators extra leeway to clamp down on risk-taking investors won’t cut the cost of driving, which is up for other reasons anyway. But it should placate voters without hurting markets.
Brazilian billionaire banker tests investor mettle 16 Apr 2012 Just days ahead of an IPO of his BTG Pactual, Andre Esteves has been fined for insider trading by Italian watchdogs. The firm shrugged off the case and says the boss will appeal. But JPMorgan’s Ian Hannam resigned to fight similar charges. The risks look big for this high-flyer.
Maybe banks needn’t overly fear new U.S. watchdog 16 Apr 2012 Crass resistance to the Consumer Financial Protection Bureau looks even more overblown following one of its first big proposals. The agency will crack down on deceptive practices on riskier loans but is OK with banks charging fees for them. That strikes a reasonable balance.
If Apple, publishers plotted they didn’t need to 11 Apr 2012 U.S. trustbusters say Apple and e-book producers conspired to raise download prices. But the model they came up with makes sense even without collusion. It gives publishers a better chance of survival. And if readers pay a bit more, at least it means books will keep coming.