Law

Credit-card crackdown will net limited rewards

22 Jun 2023

Over 80% of Americans have one, yet plastic’s complexity rivals financial derivatives. A Biden administration plan to cut late fees to $8 sounds like a step toward simplicity and a savvy vote-winner. Banks will probably be no worse off, however, and consumers scantly better.

AI’s regulation naysayers protest too much

21 Jun 2023

Lawmakers in the European Union and elsewhere are scrambling to draft artificial intelligence rules. Industry leaders like OpenAI boss Sam Altman warn the approach is too onerous. Yet the risks of pandering to special pleading exceed the dangers of stifling a nascent industry.

Crypto is dead: long live crypto!

16 Jun 2023

Already reeling from fraud and falling prices, cryptocurrencies suffered a fatal blow with US charges against two leading exchanges. Yet Felix Martin argues that the demise of speculative digital tokens may help revive their original purpose as private global currencies.

Capital Calls: Zee, Embracer

13 Jun 2023

Concise views on global finance: India’s securities regulator banned the media group’s CEO from holding any key managerial positions, putting its merger with Sony’s local unit under a cloud; the $3 bln video-game group’s new strategy hits the right buttons.

Odey brokers’ belated rethink is a cautionary tale

12 Jun 2023

JPMorgan, Morgan Stanley and others are reviewing links to the fund manager. Odey’s 2021 firing of his executive team should have been a red flag to do so even before further sexual assault allegations emerged. Brokers’ tardy responses just raise questions about their processes.

Coinbase investors are still aiming for the moon

9 Jun 2023

A lawsuit from the US Securities and Exchange Commission poses an existential risk for the crypto exchange. Yet it’s still valued at more than $11 bln, excluding spare cash. Loyal shareholders are betting CEO Brian Armstrong can avoid the crackdown – and find new ways to grow.

Greece’s reform labours are only half complete

5 Jun 2023

Investors like the euro zone’s former problem child, but a large current account deficit and corruption undermine its appeal. It’s not clear Kyriakos Mitsotakis will do what’s needed to boost savings and improve the rule of law if re-elected as prime minister, says Hugo Dixon.

Capital Calls: Turkey, Indivior

5 Jun 2023

Concise views on global finance: President Tayyip Erdogan’s new treasury minister will struggle to steer the $900 bln economy towards orthodox monetary policies; shares in the London-listed drugmaker jumped after it settled a lawsuit, making it more appealing to potential buyers.

EU-UK clearing drama heads for prosaic finale

2 Jun 2023

The bloc is stalling on allowing UK firms to clear euro derivatives after 2025. That has set off a round of financial-stability finger-pointing. Costs may rise but systemic fears are overdone. If there were real danger, London could just pledge to follow Brussels’ rules.

Capital Calls: Russian cash, Chinese car feud

25 May 2023

Concise views on global finance: European plans to divert Russian money to Ukraine are ill-thought-out; a feud between China’s BYD and Great Wall Motor is spooking investors.

A&O Shearman could live down to expectations

22 May 2023

UK law firm Allen & Overy is merging with New York's Shearman & Sterling. Creating the world's third largest legal practice with $3.4 bln in revenue could please big clients after a transatlantic service. But judging by past sector M&A, it could also create dis-synergies.

UK race to the bottom spreads to credit safeguards

19 May 2023

German property group Adler has managed to push a restructuring through London courts that violates normal principles of debtholder fairness. That might encourage other companies to follow suit. But as with watering down equity listing standards, it carries a cost.

Russia sanctions become a high return investment

19 May 2023

As older penalties lose their bite, Western powers are preparing a new round of measures to tighten the screws on Vladimir Putin. That will hurt the Kremlin and be a marginal sacrifice for Europe, which no longer depends on Moscow for its energy – a good cost-benefit balance.

Guy Hands’ misery offers bondholders a free lunch

16 May 2023

The Terra Firma owner lost a legal fight with the UK, which wants to end a controversial housing privatisation. That could force Hands to sell properties and repay 4 bln pounds of debt at a premium to its market price. It’s the kind of bet the former bond trader might have loved.

Credit Suisse debacle raises oversight question

9 May 2023

Swiss authorities hailed the state-backed rescue of the stricken lender by UBS as a commercial solution that will be light on domestic taxpayers. Banking professor and former SNB official Urs Birchler tells The Exchange podcast why the quick fix is far from ideal.

Capital Calls: Unilever, Shopify

4 May 2023

Concise views on global finance: The consumer goods company may need to backtrack on a pay package for its incoming CEO to quell a shareholder revolt; shares in Canadian e-commerce firm Shopify shot up over 20% after it said it was selling its logistics business to Flexport.

UK listing shakeup requires double dose of hope

3 May 2023

Britain’s financial watchdog wants to spur domestic IPO markets by weakening shareholder protections. Yet making London appealing to fast-growing foreign firms requires wider reforms that may not occur. And lower standards are only a good idea if investors punish bad governance.

Capital Calls: Plan C for Teck Resources

26 Apr 2023

Concise views on global finance: The Canadian miner withdrew a shareholder vote to split coal from copper as it looked set to fail. If a promised “simpler” breakup plan also falls short, the $24 bln takeover bid from Glencore may become more appealing.

Chile’s lithium grab puts foreign miners on notice

21 Apr 2023

President Gabriel Boric will force producers of the EV battery metal to be junior joint-venture partners to the state. Foreign miners expected a tax hike, and global lithium supplies are diversifying. But Boric’s gambit means copper players like BHP will wonder if they’re next.

Capital Calls: Allianz’s fintech sale

19 Apr 2023

Concise views on global finance: The $100 bln insurer may offload its 5% stake in German digital banking startup N26, a decision that would make all kinds of sense.