Corporate Governance

Enough already from Hank Greenberg

2 Apr 2009

He s right that AIG s leadership since 2005 and its bailout have been disastrous. But he thinks only someone as smart as him can manage the insurance empire. In reality, the best gloss is that he created a beast only he could control. He should admit that failure or keep quiet.

UK bank rescues heighten restructuring complexity

1 Apr 2009

RBS and Lloyds are putting risky corporate loans into the UK assetprotection scheme, capping future losses. That could drive a wedge between them and other creditors if borrowers have to undergo a restructuring. It may also see fewer distressed loans sold cheaply to hedge funds.

Whose finger will be on the anti-bubble button?

18 Mar 2009

Adair Turner, boss of the UK s FSA, has rightly identified the need for new weapons to stop the next bubble. But he has left open the question of whether his finger, the Bank of England s or both will be on the button. Resolving this is critical.

Rio Tinto gets chance to offer olive branch

17 Mar 2009

The AngloAustralian miner has named Jan du Plessis as its new chairman. Investors disgruntled with Rio s plans to raise capital from Chinese miner Chinalco shouldn t get too excited, as he s firmly committed to the deal. But it may be easier for du Plessis to rewrite the terms.

Tax loopholes should be consigned to history

17 Mar 2009

It s hard to blame the likes of Barclays for avoiding tax by elaborate fiscal engineering. The real error is that governments have allowed loopholes to mushroom. Normally, cracking the problem would be hard. But the financial crisis may have changed the zeitgeist.

Guy Hands wisely focuses his efforts

17 Mar 2009

The Terra Firma founder is giving up his CEO role to focus on investing. With private equity under a cloud, it's easy to find sinister explanations. But running a buyout firm is different from investing its funds. Private equity investors should welcome such divisions of labour.

No need for European banks to say sorry about AIG

16 Mar 2009

NonUS banks have received $60bn from AIG in the costliest bailout in history. US taxpayers may not be happy about helping foreigners, but the banks got no more than their contractual due. That s how bailouts should work. There s nothing for the Europeans to feel guilty about.

Citi’s new board picks hit the right note

16 Mar 2009

The ailing bank sorely needs some experienced and respected market heavyweights as directors. Pimco s former head honcho, a retired Fed president and two savvy bank bosses could do the trick assuming they and Citi chief Vikram Pandit can work together effectively.

Scandal of a century ends with a whimper

11 Mar 2009

That s it move along nothing to see here. Madoff will plead guilty and go to jail. No riots, no riveting trial just a sad old man in a Barney s trench coat checking into a correctional facility. Madoff was a brilliant fraudster, but he s proving a colourless villain.

Satyam fallout limited, but India can do more

9 Mar 2009

A sale process has begun for the stricken IT outsourcer, only three months after a $1bn accounting fraud was revealed. Bidders are queuing up. The Indian government has dealt with the scandal well, but one thing is still missing a successful prosecution.

A good chairman is hard to find

9 Mar 2009

UBS, BP and RBS are the latest to struggle. Firms are playing musical chairs, dragging grandees out of retirement or hiring ones who feel a begrudging sense of duty. The crisis has discredited many candidates and scared away others. Expectations for the role have grown too high.

Glass-Steagall rerun is not the answer

9 Mar 2009

The idea of forcibly separating casino capitalism from utility banking has superficial attractions. But such a divorce wouldn t have stopped the crisis. A better solution is stronger regulation for both the casino and the utility, says Hugo Dixon.

New Citadel fund’s cheaper fees still look cheeky

6 Mar 2009

The hedge fund outfit is charging 2% of assets and 20% of gains on a new fund. That s much less than the firm used to pull in on its flagship funds until they lost 55% last year. But investors are scarce. They should have the clout to make even 2and20 a thing of the past.

Citi needs a Justice League board of directors

5 Mar 2009

Above all, the bank needs credible directors unafraid to ask tough questions. But given Citi s future, the board could use also the superhero powers of Buffer Woman, Distresso, Utiliton, Captain Workout and The Breaker.

New chairman signals new priorities for UBS

4 Mar 2009

The Swiss bank installed its general counsel as chairman last year, correctly anticipating a legal onslaught. Peter Kurer did all he could in near disastrous conditions. The main battle now is political, so Kaspar Villiger, an exSwiss finance minister, looks right for the job.

Credit Suisse veterans could nest in Grübel’s UBS

27 Feb 2009

New UBS boss Grübel will want to stamp his mark on the bank by recruiting fresh blood. The exCredit Suisse CEO could face hostility by raiding his old employer for top talent. But that shouldn t stop him from hiring some of his former colleagues to create a trusted inner circle.

Higher base salaries not the answer for bankers

27 Feb 2009

Bonus has become such a dirty word that UK regulators are now encouraging higher base salaries for bankers. This is the wrong sort of reform. It will mess up the industry s business model. Much better to focus on linking bonuses to genuine performance and profits.

Grübel lands at UBS with Obama-size expectations

26 Feb 2009

The former Credit Suisse boss is exalted in Switzerland for rescuing one of its national treasures. Now Grübel must do the same for UBS. The new CEO has gravitas and restructuring savvy. But he can t quickly undo the bank s many missteps, or turn the economy around.

Prop trading should survive FSA attack – just

26 Feb 2009

The UK regulator wants banks to hold substantially more capital against trading activities. That would sharply lower returns, and could accelerate the migration to hedge funds. But there should still be room for disciplined and cautious bank prop desks.

News Corp board must show backbone on succession

24 Feb 2009

The exit of Peter Chernin should not make James Murdoch s elevation to the top of his father s media empire a fait accompli. He may well be the right man to follow Rupert Murdoch. But the board should consider alternatives especially after the group s recent poor performance.