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from Breakingviews:

Alibaba is case study in U.S.-China legal gulf

By Richard Beales

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Alibaba’s coming U.S. initial public offering will probably value the Chinese e-commerce firm at more than $100 billion. But will shareholders actually own the business? That’s the timely concern raised by a U.S. congressional commission. Lack of clarity in PRC law is mainly to blame.

The U.S.-China Economic and Security Review Commission, which monitors bilateral relations on behalf of Congress, on June 18 published a paper highlighting the legal risks of so-called variable interest entities. Many Chinese companies use these contracts to give offshore investors control over - and economic benefits from - mainland businesses they cannot own directly.

Investors have swallowed the risks of VIEs in plenty of other cases, like the recent U.S. IPO of microblogging site Weibo. Foreign shareholders assume the Chinese authorities would be reluctant to undermine the growing number of companies with overseas listings that rely on the structures.

from Breakingviews:

Glaxo wrestles with its past

By Neil Unmack

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Investors keep taking hits on GlaxoSmithKline. The pharmaceutical group’s stock price has fallen nearly 10 percent in the last year on the back of weaker sales and bribery accusations in China. News of a criminal investigation in the United Kingdom knocked almost $2 billion of its market capitalisation on Wednesday morning.

from Breakingviews:

Astra has small tactical advantage over Pfizer

By Christopher Hughes and Neil Unmack
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Time often benefits bidders rather than targets – that’s why U.S.-based food group Kraft left Cadbury flailing for months after making a takeover approach for its UK competitor. But the dynamics of Pfizer’s interest in rival pharmaceuticals group AstraZeneca are unusual. Pfizer has good reason to seek a quick, agreed deal.

from Breakingviews:

China’s capital flight may be banks’ next headache

By Peter Thal Larsen

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Western banks’ next regulatory headache could be made in China. Most of the recent scrutiny of financial institutions’ business practices has come from the developed world – particularly the United States. But as Chinese citizens become more aware of the offshore wealth held by the country’s elites, banks are increasingly at risk of a regulatory backlash.

from Breakingviews:

Deutsche is wasting its Libor crisis

By Dominic Elliott and Olaf Storbeck

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Deutsche Bank is wasting a crisis. In September 2012, newly appointed co-Chief Executives Juergen Fitschen and Anshu Jain said the German lender would be at the forefront of cultural change in the banking industry. That goal keeps moving away from them.

from Breakingviews:

China’s bureaucrats play online war games

By Robyn Mak 

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Who governs the internet? Authorities in China can’t decide. The Ministry of Culture, a relatively unknown agency, staked a claim by clamping down on online games on Dec. 13. China’s leaders say they want to foster an innovative economy, but the tussle between the young internet sector and an outdated bureaucracy raises questions about whether they really mean it.

from Breakingviews:

Benefits of being “G-SIFI” seem to outweigh costs

By Peter Thal Larsen

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

The benefits of being labeled “too big to fail” may just outweigh the costs. Since regulators first published their list of global systemically important financial institutions, or G-SIFIs, the banks concerned have boosted capital and tamped down balance sheets. But smaller lenders, particularly in Europe, have done the same without joining the club. And shareholders seem not to notice much of a difference.

from The Great Debate:

Antisocial genesis of the social cost of carbon

The day after his 2009 inauguration, President Barack Obama committed to “creating an unprecedented level of openness in government.”

He vowed to build on “transparency [that] promotes accountability by providing the public with information about what the government is doing,” “participation [that] allows members of the public to contribute ideas and expertise,” and “collaboration [that] actively engages Americans in the work of their government.”

from Breakingviews:

Indonesia biggest loser from bank merger flop

By Peter Thal Larsen

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

There are no winners from DBS’s failed takeover of Indonesia’s Danamon. But the biggest loser is Indonesia’s attractiveness as a destination for foreign investment.

from Breakingviews:

Singapore’s creative bank penalty may be a one-off

By Peter Thal Larsen

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

Singapore has come up with a creative way of penalising rate-rigging banks. Regulators are forcing lenders implicated in manipulating the city-state’s borrowing and currency rates to set aside up to S$12 billion ($9.6 billion) in extra central bank reserves. With rates low, however, the costs will be much lower than recent mega-fines.

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