EMEA

Machines beat humans as Man Group stumbles

28 Sep 2011

The world’s largest listed hedge fund saw its assets shrink 8.5 percent in the current quarter, sending its shares tumbling. While its computer-driven trading fund is recovering, star managers have struggled. It’s a reminder that in volatile markets, fat fees are hard to justify.

Europe’s firefighting still faces ECB hurdle

28 Sep 2011

A comprehensive plan to solve the euro zone’s sovereign debt crisis depends on the ECB’s approval. Any solution, be it leveraging the EFSF or turning it into a bank, will only be partial if the ECB doesn’t back it.

Under Putin’s "stability", Russian uncertainty

28 Sep 2011

Russia’s politics will not become more stable just because Vladimir Putin is running for president again. The abrupt sacking of Finance Minister Kudrin is yet another lesson in Russia’s unpredictability. This reflects deeper factors that won’t simply vanish after the election.

ECB must be euro zone’s lender of last resort

27 Sep 2011

The European Central Bank must prevent contagion from the insolvent periphery. It should clearly state its willingness to buy sovereign bonds on the secondary market now and at all future times of crisis. Governments should not rely on the EFSF.

Bank funding tightens noose around Greek necks

27 Sep 2011

As the country nears default, deposits are flowing out of Greek banks again. Worse, collapsing government bond prices are making it harder to borrow from the ECB. That leaves lenders dependent on the Greek central bank – increasing the strain on struggling domestic finances.

UK rebalancing is a generation’s work

27 Sep 2011

Layoffs at Britain’s largest manufacturer sound like “de-balancing”, but BAE’s woes are more a sign of how hard it is to move the economic centre. Finance-bashing may be fun for politicians, but isn’t helpful. Rebalancing economies and societies requires much more than slogans.

Spain should not rush savings bank sales

27 Sep 2011

The country’s bank rescue fund is preparing to offload a bust lender with the help of generous guarantees. But a deal would transfer any upside to buyers, while leaving the state on the hook for most future losses. With more bank nationalisations to come, Spain should hold on.

Global SWAT team needed to close tax loopholes

26 Sep 2011

Tax-based financing deals like those between U.S. and UK banks being targeted by U.S. authorities use legal mismatches to reduce tax bills. They are lucrative, but have no economic value. Such questionable arrangements might be best tackled in a focused multilateral forum.

UBS shouldn’t wait to put Weber in the chair

26 Sep 2011

The former Bundesbank chief is not due to take over as chairman until 2013. But the rogue trading loss and departure of chief executive Ossie Gruebel has left the Swiss bank reeling. Provided his former employer agrees, UBS should put Axel Weber in charge as soon as possible.

Economists shouldn’t bask in woes of physicists

26 Sep 2011

Theorists on production and consumption, often jealous of their hard-science counterparts, may be tempted to gloat if neutrinos really do travel faster than light. But ignorance by economists is more harmful. It contributed to the financial crisis and subsequent policy paralysis.

IMF’s dovish turn may be seen as favor to the rich

26 Sep 2011

The fund has long been a tough schoolmaster on fiscal probity. This softened after 2008 and now the IMF is proposing still more stimulus in some nations. This makes economic sense but opens the fund to charges that it pushes Keynesianism for the rich and monetarism for the poor.

Putin’s third term undermined by Kudrin’s exit

26 Sep 2011

Russia’s finance minister has dismayed investors by saying he doesn’t want to serve in the next cabinet. Pique at not getting the premier’s job may be to blame. But Kudrin’s decision also reflects policy tensions. Without him, it will be tougher to keep Russia’s finances steady.

Gulf liberal shift is more than sop to Arab Spring

26 Sep 2011

Saudi is giving women the right to vote. It follows the UAE’s decision to expand the electoral roll for its recent elections. These cautious democratic steps will help insure stability. But they’re also crucial for introducing the taxes required to reduce dependence on oil.

Europe can protect itself against a Greek default

26 Sep 2011

A three-pronged plan is required to fight contagion: 175 bln euros for bank recaps; extra liquidity, again for banks; and a beefed-up bailout fund to help Italy, if needed. Europe looks like it is moving in this direction. But, as always, the fear is that it will be too timid.

Putin’s presidential bid step backward for Russia

24 Sep 2011

The prime minister’s decision to run for president again, in place of his more reformist protégé Dmitry Medvedev, dashes hopes for reinvigorating the country’s economy, society and politics. Russia can look forward to a long period of creeping stagnation and seething discontent.

Gruebel’s principled departure leaves UBS adrift

24 Sep 2011

The man brought in to save the Swiss bank felt the need to take responsibility for the rogue trader. But interim boss Sergio Ermotti only just arrived in April. If an estimable veteran like Gruebel couldn’t rid the deep rot from UBS, the future of the investment bank looks dim.

Euro zone bailout sheriff idea looks far fetched

23 Sep 2011

Juergen Stark, the ECB’s departing board member has called for a euro zone “financial receiver” to take over budgets of bailed-out countries. The proposal looks like a provocation and is a political non-starter. And if it could be achieved, it wouldn’t be necessary.

Spain could cut costs by cutting lunch

23 Sep 2011

Competitiveness is one of the Spanish economy’s main problems. Cutting down on the long workday could boost productivity and reduce energy bills. A shorter lunch would be a good first step.

EU bank rescuers have fewer options than in 2008

22 Sep 2011

If lenders fail to recapitalise privately, governments will step in. Some tools from the last crash, like preference shares, now look out of date. State-underwritten rights issues could work. But to solve the crisis, the euro zone also needs coordinated action on bank funding.

Swiss retain the upper hand on their currency

22 Sep 2011

The Swiss National Bank has taken to playing poker. Euro refugees and speculators still fancy the franc. So a central bank adviser has warned of another devaluation. It probably won’t come. But the threat makes it easier to keep the franc down.