China fines infant formula firms £71m over price-fixing charges August 7, 2013 CHINESE authorities yesterday issued fines totalling 670m yuan (£71m) on six global producers of infant formula following a probe into price fixing, according to state media. The six companies are Biostime, Mead Johnson, Dumex, Abbott, Friesland and Fonterra. The National Development and Reform Commission (NDRC) says that the firms set minimum resale prices for distributors [...]
Vodafone sues Telecom Italia for over €1bn August 4, 2013 VODAFONE Group is suing Telecom Italia for abusing its dominant position in Italy, seeking damages of more than €1bn (£868m). A Vodafone spokeswoman said the civil action in Milan stated that Telecom Italia committed a series of abuses from 2008 to 2013 “with the intention and effect of impeding growth in competition in the Italian [...]
New regulation threatens the success of Britain’s thriving insurance sector August 4, 2013 SINCE the financial crisis, policymakers have focused on regulating banks. But while banking plays a central role in the financial sector, insurance plays another. The UK insurance industry is the largest in Europe. It manages investments amounting to 26 per cent of annual GDP, and accounts for £10.4bn in tax revenue, employing 290,000 people in [...]
Bankers as trapeze artists, central planners and markets July 30, 2013 THERE are three ways we can organise banking. The first, which I don’t recommend, is to adopt the pre-2008 model; the second is the current approach, which seeks to micro-manage everything and which will also fail; and the third would be to allow genuine market discipline to be reinstated. Under the first approach, there [...]
Hamstringing banks with higher capital requirements will not stop the next crisis July 30, 2013 GREAT fallacies periodically grip the British establishment and cause enormous harm to the economy. The last big one was the obsession with joining the European Exchange Rate Mechanism at the end of the 1980s. Now we have the regulative fallacy. The great and the good are in its grip. They identified banks and excessive debt [...]
Why we musn’t fear the rise of emerging market state-backed champions July 28, 2013 WHAT do Airbus, Michelin, Hyundai, NEC, Samsung, Singapore Airlines, Volkswagen, and LG have in common? They all started life as national champions, companies supported by the state while their countries emerged from the ravages of war. Although advanced economies have rightly shifted away from the model, the achievements of these firms in the global marketplace [...]
Letters to the Editor – 29/07 – Church loans, China economy, Best of Twitter July 28, 2013 Church loans [Re: Church of England launches probe into link with Wonga, Friday] The Church should be applauded for the proposed venture into the payday lending market. Its decision is laudable not because there is anything evil about Wonga, nor because of the supposed moral desirability of constraining reckless capitalism. The archbishop’s intention to outcompete [...]
We must urgently improve the quality of our economic growth July 24, 2013 BARRING an astonishing shock, today’s second quarter UK GDP figures will be good. But while economic activity is now clearly increasing again, I’m deeply worried about the quality of the growth and its sustainability when monetary policy is eventually tightened. Ever since the Keynesian revolution, the City and government have been far too obsessed with aggregate, [...]
Bottom Line: Competition concerns could hert(z) July 22, 2013 AS TALKS between Telefonica and KPN dragged into the night yesterday, it soon became clear that regulatory concerns remain the biggest threat to any deal being agreed. It’s no wonder the talks have been revived after years of to-ing and fro-ing between the parties – the German wireless market is incredibly competitive, and a merger [...]
Lessons for regulators from Chris Froome’s Tour de France victory July 21, 2013 MANY of us have been enthralled by Chris Froome’s Tour de France win, helping restore our faith in this global event. Cycling’s regulator’s overwhelming problem is to maintain the credibility of the competition by deterring, detecting and punishing cheating. We can use the Union Cycliste Internationale (UCI) as an analogy for the British financial regulatory [...]