EMEA

Can the BRICs save the PIIGS?

21 Sep 2011

Brazil’s limited offer of $10 billion of support is pure posturing. But its idea to channel it through the IMF has merit. But why limit the effort to the BRICS? Other large holders of reserves - such as Japan and Saudi - should also join the club.

ECB must give bank sickness long-term cure

21 Sep 2011

The European Central Bank is flooding Europe with short-dated funds to ease money market tensions. But banks are still struggling to issue long-term debt, increasing the risks of a dangerous credit crunch. The ECB should ease the strain by setting up a longer-term facility.

Al Jazeera shake-up may signal shift for Qatar Inc

21 Sep 2011

It isn’t clear why Wadah Khanfar, the director who put the outspoken state-owned broadcaster on the map, resigned. But the quiet frenzy over his departure amid the tumult in the Arab world underscores why it may be in Qatar’s interests to strengthen its ties with the Kings’ club.

Pseudo-devaluation could help euro periphery

20 Sep 2011

Greece and its ilk would have to quit the euro to devalue their currencies. But the IMF is offering a tip to mimic the effect: rejigging taxes to benefit exports and hurt imports, especially by hiking VAT. Portugal is trialing the idea. It has drawbacks, but options are scarce.

IMF’s education remedy won’t cure rich world ills

20 Sep 2011

The fund’s flagship yearly outlook laments a jobs crisis and rising inequality in wealthy nations. But its prescription of more education spending is unlikely to do the trick. Though desirable in many ways, such outlays aren’t the golden ticket economists often claim.

UBS rogue trader a chance to test bonus clawbacks

20 Sep 2011

The Swiss bank’s $2.3 billion trading loss is big enough to wipe out its 2011 bonus pot. But a ’doughnut’ round risks a further staff exodus. Better to share the pain with shareholders, while clawing back pay from senior staff. The amount may be small, but the gesture counts.

Man U investors can always vote with their feet

20 Sep 2011

The soccer club may list in Singapore with “stapled” securities that could entrench the Glazer family’s control. But though new investors may not get the voting power they’d like, that can be reflected in the price. If the idea sounds too tricksy, would-be backers can say no.

Ruling is blow for Yukos compensation bid

20 Sep 2011

The European Court of Human Rights has offered only weak support for the claim that the Russian government expropriated the Yukos oil company, and ruled in favour of Russia on crucial points. The legal battle isn’t over, but Russia will breathe a sigh of relief.

Ireland gets good grades but hasn’t passed yet

20 Sep 2011

Dublin is crawling out of the PIIG sty. Irish bonds outshone those of Portugal and downgraded Italy during the summer turmoil. The country is ahead of target on its IMF programme. But it’s still vulnerable to weak global growth prospects and to dysfunctional euro zone governance.

Shareholders need more power over boardroom pay

19 Sep 2011

The UK’s maverick business minister used his party conference as a platform to launch a government rethink on executive pay. The move isn’t as politicised as it might seem. Vince Cable has investors in mind, and the aim is to promote transparency and pay-for-performance.

Qatar risks a foreign investment pile-up

19 Sep 2011

The gas-rich state might have around $100 bln to throw at foreign assets, based on guesses at the size of its sovereign fund. A 7.5 pct stake in Franco-German EADS would cost less than $2 bln. But Qatar’s overseas spending doesn’t look as focused as its domestic growth ambitions.

UniCredit’s capital options lie eastwards

19 Sep 2011

Since missing the boat on capital raising earlier this year, sovereign concerns have smashed the Italian bank’s share price. Underwriters may only back a rights issue if the euro zone crisis eases. The best option might be to find a deep-pocketed Middle Eastern investor.

Five questions the UBS investigations must answer

19 Sep 2011

The $2.3 bln rogue trading scandal raises questions about the Swiss bank’s cash management, internal controls, and supervision of its traders. It also points to structural flaws in the market for exchange-traded funds. Here’s what investigators and regulators should focus on.

Repsol is wrong to get heavy with activists

16 Sep 2011

The Spanish oil giant is angry at a new shareholder pact between construction firm Sacyr and Mexican energy group Pemex. The activists’ interests may conflict with those of other shareholders. But their immediate demands make some sense, and a big battle benefits no one.

Germany sends hopeful signals on euro future

16 Sep 2011

Berlin’s attitude towards the euro zone has become more positive, and less inconsistent, in recent weeks. Its partners should welcome the change and be encouraged. Germany, however, is still to fully appreciate that austerity for all will mean recession for everyone.

How could UBS not have learnt from SocGen?

15 Sep 2011

Unauthorised trades that cost the Swiss bank $2 bln took place in the same area that spawned a $7 bln fraud at SocGen in 2008. “Delta One” is meant to be a low-risk client-focused unit. One theory is that related arbitrage trades went awry. Right or wrong, it’s still baffling.

Egypt’s clash with Israel puts investors on guard

15 Sep 2011

The attack on the Israeli embassy in Cairo underscores the dislocation between youth and ruling military. U.S. funding for the army is tied to the peace treaty. But the army’s future role is unknown. The latest row adds to the growing list of foreign investors’ worries.

Prokhorov pays the price for irking Kremlin

15 Sep 2011

Three months after launching his political career, Russian tycoon Mikhail Prokhorov has been forced out as the leader of a pro-business party. Even the tame oligarch was too independent for the Kremlin, belying hopes that President Medvedev can or will hasten political reform.

Rogue trader puts UBS investment bank at risk

15 Sep 2011

The source of unauthorised trades that triggered a $2 bln loss is unclear. But the bombshell is a blow to the Swiss lender’s claim that its de-risked trading business poses no threat to its private bank. Though UBS can weather the financial hit, a break-up is back on the agenda.

UK, ECB spat highlights derivatives arms race

15 Sep 2011

The UK says the ECB’s policy on central clearing breaks EU law. The ECB’s requirement that euro-denominated products be cleared in the euro zone may be as much control-freakery as realpolitik, but London has reason to fear it could damage the City’s grip on derivatives dealing.