RAPID RESPONSES June 12, 2012 Confidence shaken [Re: Euro establishment isn’t learning any lessons from the crisis, yesterday] Euro debt is out of favour, but Europe certainly isn’t. Who wouldn’t want a piece of Europe? If debt were converted to become asset backed – governments would have to surrender their assets in a default situation – then I see no sovereign debt [...]
Why private bondholders need to share in Spain’s banking pain June 11, 2012 IT’S under control. That seemed to be Mariano Rajoy’s message as he left for Poland to watch Spain take on Italy, hours after finalising a €100bn euro rescue deal for the country’s banks. The Spanish Prime Minister and EU finance ministers can certainly be pleased at achieving such a quick deal, but they should not [...]
Football has a lot to teach those in power about good economic policy June 11, 2012 EURO 2012 is in full swing, which is great, not least because of the many parallels between the economy and football. Monetary policy has a similar function to goalkeepers. Central banks are the last line of defence and their primary task is to avoid making mistakes. Goalkeepers will rarely win you a match, but they [...]
There’ll be no UK Zuckerberg while we fear all failure June 11, 2012 POKE fun at Facebook’s plummeting shares all you like. Call the company overhyped. Doubt its lofty valuation. But the facts remain: Facebook, born eight years ago in Mark Zuckerberg’s Harvard dorm room, has nearly a billion regular users and dominates internet social networking. Whether or not it continues to grow at breakneck speed, we’re all [...]
As Tesco reports a drop in UK sales, has the retailer been pursuing the wrong strategy? June 11, 2012 YES Richard Perks “Retail is detail” and Tesco has been getting too many of the details wrong – poor quality, bad service, tired stores and an inept marketing function that couldn’t cope with Asda’s price guarantee. Very basically, Tesco has been using the UK as a cash cow to provide funds for development elsewhere. But, [...]
RAPID RESPONSES June 11, 2012 Moral hazards [Re: It’s time governments stopped bailing out bankrupt banks, yesterday] Banks won’t stop behaving responsibly until they know that behaving irresponsibly results in unmitigated disaster for them. That means letting them fail and making sure directors and executives enjoy a level of liability for their actions. Failure would suddenly seem much less appealing if [...]
Get out the way: Small firms must be allowed to return UK to growth June 10, 2012 THE EUROZONE crisis is like a tragic opera: a torturous tale in which half the cast will be dead by the intermission. Of the Eurozone’s 17 characters, 12 are in recession, while all are banking on Germany to play the hero and keep the whole racket going. Monetarists and Keynesians disagree on how to return [...]
UK shareholders are set to rise in activist autumn June 10, 2012 SHAREHOLDER activism is one of this year’s biggest business stories, as the recent public disputes over executive pay attest. But this is just the beginning. The conditions are ripe for the shareholder spring to turn into an activist autumn. Where does shareholder activism go from here? The debate on executive pay will now focus on [...]
The City’s success needs a cocktail of local stability and global enterprise June 10, 2012 DURING my travels as Lord Mayor, I have sampled many cocktails at home and abroad. During my recent business mission to the Far East, I had a particularly fine one – a bright concoction known as the Singapore Sling, offered to me in the place where it was first mixed. It represents globalisation in a [...]
As Syria nears civil war, has the Arab Spring proven a general success across the region? June 10, 2012 YES Brendan O’Neill The idea that the Arab Spring has become an Arab Winter reveals more about Western prejudices than about reality in the Middle East. Many say the upheaval was more akin to Iran 1979 than France 1789, with Islamists rising. Yet if Islamists are doing well, it is by default a result of [...]