Politics

Monte dei Paschi endgame can still be made fair

22 Dec 2016

Italy's third-biggest bank unsurprisingly failed to raise 5 billion euros. A forcible debt-for-equity swap would limit state money. If compensation was only paid to mis-sold retail creditors, MPS could be rescued within European rules and without unfairly hitting taxpayers.

Spanish banks get their mortgage comeuppance

21 Dec 2016

Domestic lenders must refund excess interest charged on housing loans with floor clauses, after the European Court of Justice unexpectedly overturned a Spanish ruling. Fair enough: the original verdict was too kind on banks. The hit to earnings looks painful, but manageable.

South African debt will be downgraded before Zuma

21 Dec 2016

After legal and political setbacks, the country’s president is more vulnerable than ever. Yet Jacob Zuma’s power base makes removing him difficult. The longer he clings to office, the bigger the chance that South Africa loses its investment-grade credit rating in 2017.

Turkey-Russia pact can survive Ankara flashpoint

20 Dec 2016

Moscow’s ambassador in the Turkish capital has been shot dead by a policeman seeking revenge for Aleppo. In 2015, Recep Tayyip Erdogan and Vladimir Putin were at loggerheads. Now mutual self-interest over Syria and a perceived common enemy mean the shock can be smoothed over.

Mega-merger market set for last gasp

20 Dec 2016

Cheap debt and falling hurdle rates will keep bosses on the hunt. Border-spanning acquisitions are harder to square with trustbusters, however, and big targets less affordable as an M&A cycle ends. That makes space for smaller deals, which in any case tend to create more value.

U.S.-China currency war will be symbolic at best

20 Dec 2016

Donald Trump has promised to declare the People’s Republic a currency manipulator. The label means little, though, and the yuan is probably overvalued. The best case is that the U.S. president-elect declares victory and moves on. The risk is that hardliners in Beijing react.

Trump governance carries Chinese characteristics

19 Dec 2016

The U.S. President and his counterpart in Beijing have a surprising amount in common. Like Xi Jinping, the tycoon is eager to pump up growth, disdains free speech and wants to restore his nation to former glory. Here are some other parallels to watch for in Trump's first year.

Ukrainian bank clean-up comes at a cost

19 Dec 2016

The war-torn country will rescue the largest private lender PrivatBank. It suggests Ukraine’s banks are emerging from the shadow of oligarch owners and bad lending. Yet the deal hurts Ukraine’s shaky finances, and may inflame political opposition to the IMF-dictated austerity.

Italy will find itself in market crosshairs again

19 Dec 2016

With rates rising, countries with high debt and fragile growth are vulnerable. Italy's political weakness makes tough choices on reform or spending cuts even harder. Even though the European Central Bank will keep buying government bonds in 2017, investors' nerves will be tested.

Energy Dept choice pits Trump against bureaucracy

16 Dec 2016

Rick Perry ran for the White House promising to dismantle the federal energy agency. Now the president-elect wants him to run it. The DOE is already resisting a Trump request to list staffers working on climate change. Animosity from the "deep state" could slow-roll his agenda.

Breakdown: Dodd-Frank, Trumped

15 Dec 2016

The U.S. president-elect wants to unwind some post-crisis financial rules. Given their slim Senate margin and regulators' support for key reforms, Republicans may have to pick their battles. Tougher capital requirements would be tough to roll back, but the Volcker Rule may go.

Viewsroom: Can Big Oil’s man be diplomat-in-chief?

15 Dec 2016

Exxon CEO Rex Tillerson, Donald Trump's pick for secretary of state, is well versed in international dealmaking. But he's too close to Russia even for some Senate Republicans. Meanwhile, Goldman Sachs shuffles the top ranks and Wells Fargo's regulatory hubris comes back to bite.

Brexit could give Madrid its day in the sun

15 Dec 2016

Unlike Paris or Frankfurt, the city is not a top contender to attract financiers dislocated by Brexit. But Spain’s capital has attractions, like low costs and a friendly tax regime, that could draw in other sectors. Vitamin-D starved corporate refugees may take the bait.

Brexit transition deal offers Lloyd’s scant cover

15 Dec 2016

The London insurance market is pushing ahead with the launch of a subsidiary that could conduct EU business after Britain leaves the bloc. Lloyd’s of London is not waiting to see whether politicians can secure extended access to the single market. Banks may take a similar view.

New president may force hawkishness on 2017 Fed

14 Dec 2016

The central bank nudged interest rates up again after a year's pause. Janet Yellen and colleagues previously sounded cautious but that was before the Trump bump. If bond yields, inflation and stock prices continue to rise, the Fed will be under pressure to make quicker increases.

Brazil’s Temer puts country on knife’s edge

14 Dec 2016

The unpopular leader has won a key victory, securing constitutional reform to cap public spending for the next 20 years. That's necessary but insufficient if he is to fix Latin America's largest economy. Pension reform will be harder, though, and a corruption probe spells danger.

Small step for some is giant leap for Uzbekistan

14 Dec 2016

The landlocked central Asian country has poor human rights and low foreign investment. But new President Shavkat Mirziyoyev has made encouraging changes, like restoring air links with Tajikistan and scrapping visas for some foreigners. There is far to go, but it’s a start.

Tech needs to speak the president-elect’s code

13 Dec 2016

Most major Silicon Valley CEOs have heeded the call to Trump Tower. They may be expecting a browbeating, a deal for tax cuts – or both. Their real task, though, is to convince a hostile audience that they – and open societies – create wealth, jobs, security and power.

Brexit transition may ease not remove uncertainty

13 Dec 2016

UK Chancellor Philip Hammond sensibly wants banks to have continued access to Europe's single market after Britain's departure to protect financial stability. That would give them longer to make alternative plans - but also risks prolonging doubts about the final arrangements.

UniCredit’s bankers should avoid 2012-style panic

13 Dec 2016

The Italian bank's 13 bln euro cash call is almost double its capital raising five years ago, which nearly imploded. The current one also takes place in the teeth of domestic political upheaval. Yet today's UniCredit is healthier. Underwriters needn't end up holding the baby.