Law

Europe’s telcos have 20 bln reasons to love Huawei

29 Jan 2019

Ditching the Chinese supplier could push up costs for the region’s carriers, and knock 7 pct off their market value. Politicians may deem that a price worth paying to ensure the security of mobile networks. Yet slow-growing, debt-heavy telcos hardly need another cash flow hit.

Deripaska markdown will persist at En+ and Rusal

28 Jan 2019

The Russian metals groups have been freed from U.S. sanctions. Though their shares have perked up, they still trade below pre-sanctions level. Given the risk of new penalties should previous majority owner Oleg Deripaska exercise control, the valuation gap will linger.

Ghosn successors may further strain Nissan ties

24 Jan 2019

Renault has well-qualified successors lined up to replace its former CEO and chair, who resigned. They have the French state’s implicit backing. The political association could, however, raise hackles at its Japanese partner, making it harder to resolve the crisis in the alliance.

Renault-Nissan saga will eventually favour France

21 Jan 2019

Governance changes on the Japanese side may reduce its French partner’s board power. Yet Renault’s 43 pct stake is its trump card, and Nissan’s moves to skirt it are likely to fail. It’ll take time, but Paris should one day get what it wants: closer integration and maybe a deal.

PG&E takes one for the California wildfire team

14 Jan 2019

The utility is readying a bankruptcy filing, facing $30 bln of fire-related liabilities partly thanks to the Golden State’s questionable legal norms. Poor planning, including inadequate insurance, was its own fault. But state and other government actors have also fallen short.

Bond markets shrug off Danske dirty-money risks

11 Jan 2019

The bank at the centre of a money-laundering scandal saw its cost of issuing risky debt more than double. Still, its yields are far below those of Italy’s UniCredit. The troubles at the Danish lender may have further to run, and are harder to predict, than Rome’s political drama.

Holding: U.S. watchdog is in denial about denials

11 Jan 2019

As a condition of settling cases, the SEC typically bars alleged wrongdoers from later claiming innocence. This arguably violates free-speech protections. If a lawsuit challenging it succeeds, the financial regulator may finally have to start – gasp! – proving its charges.

Trump’s crisis powers are a Pandora’s box

9 Jan 2019

The U.S. president may yet try to bypass Congress to build a border wall by declaring a national emergency. In theory, similar authority could enable him to close CNN or block Facebook. Such scenarios would be tested in court. But there’s leeway, and only lawmakers can reduce it.

Ghosn puts up his freedom as bond for his legacy

8 Jan 2019

The deposed 64-year-old automaker CEO has declared his innocence. Given Japan's 99 pct conviction rate, he could face a decade in jail. Ghosn may hope prosecutors back off. Either way, the man who saved Nissan creates space to pull off another unprecedented rescue - of himself.

Credit Suisse Mozambique mess is shameful at best

4 Jan 2019

Three of the Swiss lender’s former bankers have been arrested on charges of facilitating kickbacks on $2 bln of loans for the African country. Credit Suisse blames deceptive employees and says it has tightened controls. Even if the fallout ends there, it’s highly embarrassing.

U.S. will find a way to make Danske Bank suffer

4 Jan 2019

Congress has made banks’ anti-money laundering a key concern. That bodes ill for Danske Bank, embroiled in a 200 billion euro suspicious funds scandal. The Danish lender is hardly a household name in the U.S. That gives politicians who wish to make an example of it free reign.

Deutsche Bank’s new dark clouds have silver lining

29 Nov 2018

The lender has been hit by police raids linked to clients’ alleged tax evasion and speculation its investment bank head could leave. Yet Panama Papers issues have thus far not meaningfully hit European banks. And Deutsche’s traders should have a decent 2019 – whoever’s in charge.

Holding: Big tech cruising for antitrust bruising

26 Nov 2018

Facebook’s Russian-meddling fumbles and Amazon’s second-headquarters hubris are Exhibits A and B for legal reform. Derided as “hipster antitrust,” the idea that bigness alone can breed evil is true to competition law’s original aim. It’s time trustbusters became disruptors, too.

UBS’s Ermotti can afford a legal brawl or two

9 Nov 2018

The Swiss lender has refused a $2 bln U.S. settlement over missold securities, according to Reuters. Barclays, which spurned a similar deal, offers some hope of a lower eventual hit. With healthy capital, Ermotti has headroom to fight both this and a separate French tax battle.

U.S. vote could put Wall St, Big Tech in same boat

1 Nov 2018

Polls give Democrats a good shot at taking control of the U.S. House in next week’s elections. That would mean more scrutiny for big banks like Wells Fargo and Silicon Valley titans. Tension with the White House would rise, but mortgage agency reform may spur rare bipartisanship.

In need of cool head, Brazil braces for opposite

25 Oct 2018

Far-right ex-army man Jair Bolsonaro looks set to win Sunday’s presidential runoff, riding voter anger over corruption, violence and economic stagnation. Prioritizing pension reform over strongman tactics would better address the nation’s ills. You can’t shoot fiscal deficits.

Climate suit should light fire under Exxon owners

24 Oct 2018

New York is suing the $338 bln oil giant, claiming it misled investors about carbon’s environmental risks. Shareholders weren’t dupes, though. Their proxy revolt last year forced the outfit to start addressing the issue. Legal heat should prod them to demand more than baby steps.

Saudi turmoil is new twist on old C-suite dilemma

20 Oct 2018

The kingdom’s admission that Jamal Khashoggi died in its Istanbul consulate damages the crown prince’s ability to execute his Vision 2030 strategy. If Saudi were a company, its chairman would replace the CEO and continue with economic reforms. That possibility remains remote.

Spanish bank tax hit not as scary as it looks

19 Oct 2018

Shares in Spanish lenders dropped sharply after a court ruled banks may have to refund mortgage taxes. That could mean a collective hit to earnings of up to 1.5 bln euros, based on the last four years of new loans. With lending rates set to rise, that’s painful but manageable.

Oil makes Saudi Arabia slippery sanctions target

16 Oct 2018

U.S. lawmakers are invoking a law used to impose Russian sanctions to demand answers about a missing journalist. There’s momentum for a similar penalty for the kingdom. But Saudi retaliation could hike oil prices - the opposite of what President Trump has been agitating for.