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Government & Agencies

A flawed but useful economic model for a bleak age

14 Apr 2023

Ideas become fashionable when they meet the needs of the era. John Cochrane’s fiscal theory, which states that governments ultimately determine the level of inflation, fits the bill. Despite its shortcomings, the model may be helpful, says Edward Chancellor.

Sinking Russian military crafts new arms winners

12 Apr 2023

Moscow’s share of global arms exports shrank by 27% over the last five years, to the benefit of the US and France. Deprived of Western technology, Russia’s defence industry has struggled to adapt. Its traditional customers also aren’t impressed by its poor performance in Ukraine.

China reluctantly keeps sanctions powder dry

12 Apr 2023

President Xi Jinping is swatting some firms like Micron but is deferring harsher retaliation against US export restrictions. If he scapegoats American capital, he risks pushing other countries into Washington’s camp. China’s soft economy means Xi can’t afford to lose his temper.

Temasek hospital deal channels its Dr Resilience

11 Apr 2023

The Singapore investor is taking control of India’s Manipal chain for $2 bln, doubling down as the Pai family trims. Private equity firm TPG is placing a second bet too. Growing and recession-resilient, Asian healthcare is emerging as a relatively attractive safe haven.

How FDIC dropped the ball and picked up the tab

4 Apr 2023

The US bank watchdog axed a project last year that would have used data to spot risks like those that felled Silicon Valley Bank, amid skepticism from Chair Marty Gruenberg. Had it survived, the plan might not have spared the FDIC a crisis. But it could help avoid the next one.

Pirelli will help read China investment tea leaves

4 Apr 2023

Sinochem has denied plans to ditch a 37% stake in the Italian tyremaker. But Beijing’s pressure on state-controlled firms to boost shareholder value and dump non-core assets may lead to a sale. Pirelli’s fate will have a bearing on China’s $1 trln overseas portfolio.

New EU debt rules have way to avoid past mistakes

4 Apr 2023

The European Union’s old stability pact was a poorly fitting straitjacket, yet recrafting it is politically fraught. The bloc now aims to replace strict diktats with medium-term goals. A successful framework can revive growth. But it will only work if countries follow it.

OPEC’s oil cut is less surprising than it looks

3 Apr 2023

The producer group’s shock call to slash output by another 1 mln daily barrels will annoy Joe Biden and spur inflation fears. But de facto leader Saudi Arabia had already shown it would ignore US wishes. And Chinese demand is sufficiently uncertain to justify pre-emptive action.

Capital Calls: Illumina’s odd bedfellows

3 Apr 2023

Concise views on global finance: The FTC’s order that Illumina unwind its Grail acquisition puts head commissioner Lina Khan on the same side as Carl Icahn. Khan opposes the deal because Illumina can raise prices, while the activist thinks the deal doesn't make sense.

Israel hits tech sector cash cow while it’s down

3 Apr 2023

Prime Minister Benjamin Netanyahu has delayed a controversial plan giving the state power to override court decisions. Foreign investors in Israel’s key tech sector, which accounts for half its exports, were already getting stingier. They’ll get even more so if the idea returns.

How Modi can grab India’s geopolitical “moment”

3 Apr 2023

India has a big opportunity not least because the US wants to build up the country as a counter to China. The prime minister can make the most of the chance if he moves closer to the West, addresses alleged human rights issues and is more open to trade, says Hugo Dixon.

Trump charges could leave important fish unfried

31 Mar 2023

While unprecedented, the indictment of a former US president won’t directly affect America’s economic standing. But lawmakers have more urgent things to focus on, like the looming debt ceiling, and fixing flawed bank rules. Squabbling could push them to the back burner.

Swiss anger will sour UBS’s deal of the century

31 Mar 2023

Politicians and citizens are unhappy about job cuts and future risks arising from the bank’s $3 bln state-backed Credit Suisse rescue. Parliament fury may force returning CEO Sergio Ermotti to tweak the deal. Either way, an unsavory domestic whiff could hang over UBS for years.

California oil bill is industrial policy, refined

30 Mar 2023

A state agency will soon analyze oil firms’ profit data and penalize those that gouge consumers. That’s an improvement from the windfall profit tax proposed by Biden last year. Regulators win new tools for fighting corporate greed, and responsible companies dodge a blanket levy.

US corporates and China hug awkwardly in Beijing

27 Mar 2023

Executives from Apple, Visa and others showed up at the country’s flagship investment summit to network with top officials. Both sides hope China’s reopening will reassure American investors. A consumption revival would help, but politics is making decoupling the default thesis.

Even a half-empty glass would satisfy dealmakers

24 Mar 2023

Despite efforts to put on brave faces, M&A advisers gathered in New Orleans betrayed uncharacteristic pessimism. Just as clients were coming to grips with tougher financing, regulatory and valuation considerations, banks started collapsing. Confidence is in ever-shorter supply.

Capital Calls: Microsoft/Activision, Subscriptions

24 Mar 2023

Concise views on global finance: The software giant convinced UK regulators to drop one of two major concerns about its $69 bln deal. Meanwhile, the U.S. Federal Trade Commission has picked an easier — and less controversial — fight than its antitrust crackdown.

Swiss CoCo litigation may have a broader payoff

23 Mar 2023

Holders of Credit Suisse’s $17 bln contingent convertible bonds think authorities were wrong to wipe them out. A legal challenge will take years. Still, Bern might decide to placate angry investors. And a fight will discourage countries considering following the Swiss example.

Credit Suisse rescue sends shockwaves far and wide

23 Mar 2023

The ailing Swiss lender was saved by UBS with a $3 bln takeover. In this Viewsroom podcast, Breakingviews columnists debate why the deal pushes up bank funding costs, how the new mega-lender affects Switzerland’s financial system, and why bank deposits are becoming less reliable.