Government & Agencies

Zooming car sales will hit China’s growth limit

20 Oct 2022

The country’s drivers bought 2.3 mln vehicles in September, a one-third acceleration. But incentives greased a fragile recovery by pulling demand forward. The truck market is already decelerating after a short-lived boom: carmakers from BMW to Volkswagen could be next.

Time for Europe to tame its energy cravings

19 Oct 2022

After paying through the nose to fill its gas storage reserves to 92%, the bloc is seeking to secure more affordable fuel. Measures like curbing price volatility, club purchases or flexible caps will be no panacea. While supply is tight, curbing demand is the key.

Time for Britain to try technocratic government

18 Oct 2022

Liz Truss’s authority has shrivelled and her government is under intense scrutiny from investors. In similar crises, Italy and Greece turned to non-political leaders to restore calm. After four prime ministers in just over six years, Britain should consider the same approach.

Massive fiscal U-turn leaves UK in political funk

17 Oct 2022

New finance minister Jeremy Hunt soothed investors by reversing most of Prime Minister Liz Truss’s “growth plan” and cutting short her generous energy subsidies. But he still needs extra tax hikes or spending cuts. Persuading parliament to support the switch will be a challenge.

UK still two U-turns away from financial stability

14 Oct 2022

Prime Minister Liz Truss sacked her finance minister after less than six weeks because his unfunded tax cuts roiled markets. She will now attempt a more fiscally sound approach. But her party may decide it needs another leader, while voters may prefer a change of government.

Bank mortgage tweaks presage bigger political hit

14 Oct 2022

Spain’s CaixaBank proposed a rate freeze, while UK lenders favour ad hoc relief for struggling borrowers. As interest costs soar, these won’t be enough to avoid a mess. Since cash-strapped governments can’t help, they may hammer banks with Polish-style blanket payment holidays.

Trussonomics lights slow-burning Aussie fuse

14 Oct 2022

The disastrous UK mini-budget has sparked a debate Down Under about income tax cuts due in 2024. Prime Minister Anthony Albanese risks a political backlash if he pulls a U-turn, and the treasury does have some wiggle room. But pressure to change course will be hard to extinguish.

Sovereign debt greens yet net-zero pledges darken

13 Oct 2022

Saudi Arabia’s wealth fund is the latest public body to issue securities to fund renewable assets. Strong buyer demand and the chance to flaunt action on climate change explain the boom. Yet national decarbonisation targets remain weak, and green bonds do little to improve them.

Monte Paschi life raft has yet to reach safe port

13 Oct 2022

Five years after a state bailout, the lender has secured last-minute backing for a new 2.5 bln euro rights issue. Stronger capital and fewer costs will make MPS a more palatable target. But buyers would need hefty profit assumptions to pay anything other than a lowball price.

Gig worker rule comes at bad time for gig economy

11 Oct 2022

President Biden’s administration wants to turn more independent contractors into employees. The move may squeeze firms like Uber and DoorDash that rely on casual labor. Workers are already scarce and inflation is squeezing consumers. Higher costs threaten long-awaited earnings.

There’s method to Saudi’s $38 bln gaming madness

11 Oct 2022

Riyadh says it will splash out to become “the ultimate global hub” for gaming by 2030. Saudi and the freewheeling sector are peculiar bedfellows. But with a petrodollar windfall and falling valuations, the kingdom has a good opportunity to make its unlikely vision happen.

CEO pay spotlight leaves workers in the shade

10 Oct 2022

New SEC rules mandating more detail on executive pay will burden companies without much helping investors. Yet there’s still too little transparency in how companies pay the rank and file. Investors already see what Walmart pays its CEO, but not his 2.3 mln colleagues.

Capital Calls: Trustbusters’ metaverse gambit

10 Oct 2022

Concise views on global finance: The Federal Trade Commission dialed back some of its arguments against Meta’s latest VR deal – but still faces a difficult needle to thread.

How West can mobilise trillions to help save Earth

10 Oct 2022

On top of stopping global warming, rich nations have geopolitical reasons to help the countries in the Global South transition from fossil fuels. America’s call for the World Bank to focus more on global needs like climate change is a step in the right direction, says Hugo Dixon.

India rating-agency shutdown boosts debt cleanup

7 Oct 2022

Companies that assess creditworthiness often run afoul of watchdogs, but are rarely forced to close. Banning Brickwork Ratings after years of poor performance marks a fresh charge in the country’s war against bad debt. It’ll help upgrade the $500 bln corporate bond market, too.

Pension fund blowup faces brutal second act

6 Oct 2022

The Bank of England’s $74 bln bond-buying scheme saved retirement plans from losses on government bonds. But the fallout from the crisis means funds with $1.9 trln of assets now need to reduce risk by selling corporate bonds and other esoteric assets. That will spread the pain.

UK mess bolsters case for Italian budget prudence

6 Oct 2022

Market turmoil forced British Prime Minister Liz Truss to partly ditch unfunded tax cuts. The humbling saga should help Italian would-be premier Giorgia Meloni resist her allies’ spending requests. Picking a technocrat as finance minister would give investors further comfort.

What to expect from China’s Party Congress

6 Oct 2022

This month’s quinquennial meeting will shed some light on President Xi Jinping’s policy priorities amid a slowing economy and Covid lockdowns. In this Viewsroom podcast, Breakingviews columnists offer pointers on what to watch for from this staged but critical political event.

Kim Kardashian makes an example out of the SEC

3 Oct 2022

Imposing a $1.3 mln fine on the Instagram star marks an attempt to warn other crypto promoters. It’s unclear how much impact such social-media influencers have on the market, though. Without real teeth, SEC Chair Gary Gensler risks exposing his lack of tools to regulate properly.

The end of cheap money reveals global debt problem

3 Oct 2022

Borrowing has risen to more than 250% of world GDP, far more than before the 2008 financial crisis. Rising interest rates and low growth make this burden harder to bear, causing economic stress in Europe, China and the Global South. This will poison geopolitics, says Hugo Dixon.