Corporate Governance

US consumer watchdog will have stretchable leash

1 Jul 2009

Obama s proposed Consumer Finance Protection Agency won t have the broad, unchecked power that bankers feared. But it could still make their lives difficult, especially if the president appoints antiWall Street militants to the board. That s a significant risk.

AIG shares rise 20-fold, but directors matter more

30 Jun 2009

The giant US governmentsupported insurer will again have stock trading in the $20s but only because of a reverse stock split. More importantly, a fresh slate of directors brings a range of potentially useful skills. With luck, they can help recoup taxpayers sunken treasure.

Madoff sentencing ends chapter in book of swindles

29 Jun 2009

The epic, however, will continue to expand. The conman s symbolic 150 years in jail may deter some fraudsters. But while Madoff s scam was undone by the financial crisis, the sorry tale won t do much to avoid another. It only underlines what everyone should have known already.

US energy bill’s distortions exceed its benefits

29 Jun 2009

The WaxmanMarkey bill passed Friday by the House produces no net revenue, imposes a leaky permits regime that will result in scams, mandates new Federal building codes and risks a trade war. It s also unlikely to reduce carbon emissions much. As a candidate, Obama knew better.

Can financial products be regulated like drugs?

29 Jun 2009

The Bank for International Settlements says they could be overseen the same way, with safe ones widely available, risky ones doled out carefully and new ones subject to rigorous tests. The trouble is, safety can be hard to judge. BIS must also press for better disclosure.

BP’s leftfield choice of chairman looks good

25 Jun 2009

The oil group s choice of Ericsson boss CarlHenric Svanberg as chairman is a nice surprise. Svanberg comes with no baggage. He has emergingmarket and turnround experience. And as an exice hockey player, he may have the toughguy credentials to represent BP on the world stage.

UK doesn’t need weaker code on governance

25 Jun 2009

Some big companies are upset with the comply or explain approach to rules on the composition of boards. They want something softer. But tense relations between boards and shareholders help keep standards up. If anything, investors need more not less board accountability.

Bernanke witch-hunt fails to exonerate Ken Lewis

25 Jun 2009

The Federal Reserve chief held his own under Congressional lawmakers grilling over Bank of America s acquisition of Merrill Lynch. Bernanke isn t to blame for the problems that ensued they remain the responsibility of the BofA boss.

Tax-deductibility of debt rightly in cross-hairs

17 Jun 2009

Giving companies and households an incentive to leverage themselves to the gills, as many tax systems do, helped exaggerate the bubble and bust. The IMF is now taking a pot shot at the practice. Unwinding these subsidies could be a convenient way for governments to raise cash.

Obama plan sensible but patchy

17 Jun 2009

Details of his overhaul of US financial regulation suggest a genuine effort to plug the worst holes. But much of it is a patchwork of tape, filler and dabs of paint. It will look better and could work better. But the best chance in decades of a full rebuild has gone begging.

Citigroup’s chief executive deserves more time

15 Jun 2009

Though he didn't create Citi's messes, Vikram Pandit is on shaky ground with US regulators, like the FDIC. While he's dithered a bit and botched the Wachovia deal in more ways than one removing Pandit would be unwise. BofA's Ken Lewis, now that's another matter.

A field guide to US financial watchdogs

15 Jun 2009

President Obama is set to announce regulatory reforms on Wednesday. While some are potentially meaningful, they may not do much to streamline a system the administration says is riddled with gaps, weaknesses and jurisdictional overlaps. Robert Cyran describes the key players.

Buffini shouldn’t slip into the shadows forever

12 Jun 2009

The Permira chairman is stepping down after just 18 months in a role specially created by the European buyout firm. When private equity was under assault in 2007, Buffini emerged as a reluctant but able ambassador for the industry. His retreat seems a shame and a bit lame.

No bombshells in US pay guidelines

10 Jun 2009

The rules from Treasury boss Geithner are refreshingly sensible, even dull: no pay caps or other Draconian measures. The key innovation ensuring compensation committee directors are independent is welcome. But it s down to a slightly tarnished regulator, the SEC, to enforce.

US taxpayer makes decent return on Tarp – so far

9 Jun 2009

The bailout was meant to restore faith in banks. Yet the state has made a profit on the first $68bn being returned by banks. But those are the portfolio s winners. Net off the losses from the likes of AIG and Citi and the government will struggle to stay in the black overall.

US oversight of two-time bailees’ pay is sideshow

8 Jun 2009

The government effectively runs doubledipping Tarp losers like AIG and Citi anyway. The rules and regulatory powers governing financial pay in general are of greater importance. That means avoiding micromanagement and setting clear, enforceable guidelines on pay structure.

Do failed bankers deserve second chances?

8 Jun 2009

The answer is yes but only so long as they have shown adequate contrition and have something genuine to contribute. Andy Hornby, the former HBOS CEO, fits the bill. His appointment as CEO of Alliance Boots will raise some eyebrows, but nobody has a basis to object.

Geithner still has too many balls in the air

8 Jun 2009

The US Treasury boss has backpedalled on some plans to make massive structural changes to financial oversight. But extensive, nettlesome issues remain. Obama s team should be trying to rein in expectations and set politically tenable goals before unveiling proposals next week.

Let US bank watchdogs fight it out

2 Jun 2009

Lawmakers are rightly sceptical of Obama s emerging plans for an allpowerful federal bank regulator. Duplication of effort among overseers that have tangible interests in the health of their charges could unearth problems earlier and keep them from festering.

Can the US ever make its money back on GM?

28 May 2009

It s doubtful. In exchange for more than $50bn of financing, Uncle Sam gets 72.5% of a postbankruptcy GM. For taxpayers to recoup their dollars, the whittleddown carmaker must be worth at least $70bn a value it never even achieved in its heyday.