Alphabet’s Eric Schmidt sails off before the storm 21 Dec 2017 The executive chairman of Google’s parent is stepping down as the $740 bln search giant heads into a showdown with EU regulators led by Margrethe Vestager worried by its dominance. Hiring a strong, independent chairwoman would reflect well on founders Larry Page and Sergey Brin.
Fed calls time on monetary and regulatory activism 21 Dec 2017 After nearly a decade of zero rates, asset purchases and tighter rules, the central bank is stepping back. Janet Yellen started the trend as the crisis receded, but her chair apparent promises a real laissez-faire shift. Markets may struggle to adapt to life without a Powell put.
Italy’s web tax is wrong solution to real problem 21 Dec 2017 Parliament is backing a 3 pct levy on web transactions to grab more from global U.S. tech titans. The digital economy requires new tax thinking. But an EU-wide approach would carry more force. And low projected revenue doesn’t justify the added burden on domestic internet firms.
Dealmakers find a fickle friend in hybrid bonds 21 Dec 2017 Companies are increasingly funding deals with hybrid bonds. Rating agencies' willingness to treat the debt as equity flatters their credit scores. And with interest rates low, investors are hungry for funky, higher-yielding securities. It’s a fertile but unstable combination.
India bids adieu to “promoter” capitalism in 2018 21 Dec 2017 The country's errant tycoons have fewer places to hide as Prime Minister Modi ushers in a new era of governance, starting with a strict insolvency code. This will send serial defaulters packing and signal a shift towards more market, creditor and shareholder-friendly forces.
Chinese government debt will go global 21 Dec 2017 A major index will include Chinese government bonds in 2018, dragging foreign money into a $9 trillion market. Beijing will appreciate the foreign stamp of approval. But sovereign guarantees will give scant cover against volatility spreading outwards from corporate credit.
UK rolls out banking red carpet as EU rolls it up 20 Dec 2017 EU banks can continue to operate as branches in the UK after Brexit, according to Bank of England proposals. Meanwhile looming EU rules on bank holding companies and the bloc’s insistence on bonus caps and the like suggest UK lenders shouldn't expect much leeway in return.
Bitcoin finds unlikely ally in Asian watchdogs 20 Dec 2017 Japan and South Korea make up half of global trading volumes in the $300 bln bitcoin market. Tokyo has officially recognised digital currency exchanges. Seoul is mulling the same. Regulations help contain risk but also increase acceptance and allure of this untouchable cash.
U.S. banks get the hang of dying in living wills 19 Dec 2017 Watchdogs cleared the resolution plans of the eight biggest firms though four, including Wells Fargo, need improvements. It’s a far cry from 2016, when five failed outright. It’s progress not just because banks are safer, but because they finally understand what regulators want.
Apple provides hedge against global tech backlash 19 Dec 2017 Authorities worldwide are stepping up action against technology giants over the way they erode privacy, use data to push rivals out of business and influence elections. As a security-minded purveyor of hardware, Apple stands apart. It’s likely to avoid the worst of the blowback.
A deluge of scandals in Japan will drive change 19 Dec 2017 Embarrassing lapses in governance and, perhaps even more painfully, in quality control have dented the country's reputation. The revelations are likely to continue in 2018. Company bosses will need to show that they understand what is really going on inside their organisations.
EssilorLuxottica succession blur needs clearing up 18 Dec 2017 The Italian glasses maker set to merge with France’s Essilor has replaced its CEO. New boss Francesco Milleri may succeed founder Leonardo Del Vecchio as head of the combined firm. Yet the French seem less certain. The lack of clarity could complicate an already tricky merger.
China’s shared bikes will merge into car lane 18 Dec 2017 A plague of two-wheeled startups has exhausted investor cash and municipal patience. After a cull, the biggest survivors, Mobike and Ofo, will resist calls to form a monopoly. Instead they will chain themselves to other shared-economy winners like taxi app Didi Chuxing.
Dual-class Hong Kong will double-cross Wall Street 15 Dec 2017 To compete with New York for tech IPOs, the Asian financial centre's exchange is set to host companies with super-voting stock. Investment bankers will be degraded as much as investors. They stand to be paid less for the same deals and can expect to share fees more widely.
U.S. online rules keep buffering despite FCC plan 14 Dec 2017 The watchdog will no longer require internet service providers to treat content equally. It’s a boost for the likes of Verizon and a setback for Netflix and others. But the decision will face lawsuits and many in Congress are opposed, which may leave regulations in flux.
M&A friction limits EU single-market opportunity 13 Dec 2017 Two Spanish ministries are interfering in a 16.5 bln euro Italian bid for local toll-road group Abertis. France and Italy similarly meddled in recent cross-border deals within the euro zone. Building scale isn’t proving as borderless as proponents of EU champions would like.
Exxon climate U-turn deserves wary investor cheers 12 Dec 2017 The $350 bln oil firm is finally planning to comply with shareholder demands – approved months ago - to disclose how global warming will affect its business. That’s welcome. But Exxon’s reputation for fobbing off such concerns means investors need to not just trust, but verify.
Cox: Popping gun bubble to bring financial casualties 12 Dec 2017 Five years since Sandy Hook, the firearms trade has never had a better friend in the White House than Donald Trump. Yet the industry is in terrible shape, having already fulfilled years of future demand. Storied Remington, maybe others, will face bankruptcy in 2018.
Bitcoin futures set scene for more gambling 11 Dec 2017 The 20 pct surge on new CBOE cash-settled contracts is sedate by crypto-currency standards. There’s still cause for concern. Rather than being a useful hedge, futures make it easier to trade bitcoin without actually owning it. For now they have little utility beyond speculation.
U.S. hands HSBC CEO perfect going-away gift 11 Dec 2017 The end of a five-year agreement over money-laundering lapses removes the threat of authorities yanking the bank’s U.S. licence. HSBC devoted 8 pct of its operating expenses to compliance last year. Though those costs will stay, departing boss Stuart Gulliver can leave on a high.