Breakingviews

UK banks need government to solve funding squeeze

December 6, 2011

The Bank of England’s new 30-day facility should help keep lenders afloat if the euro crisis causes short-term liquidity to dry up. But banks also need help refinancing 140 billion pounds of term debt in 2012. For that, the state may need to guarantee their debt once more.

UK Investors’ bank bonus campaign needs teeth

December 7, 2011

The Association of British Insurers has asked the UK’s five largest banks to cut compensation to the point where returns exceed the cost of equity. The request is reasonable. But it will only work if shareholders are also prepared to vote against directors who don’t respond.

Michael Kors IPO cut from same cloth as Prada’s

December 7, 2011

The U.S. designer’s eponymous firm is seeking a luxury price tag of up to $3.6 bln in a New York float. It’s an all-American fashion name and the high-end valuation isn’t out of line with Prada’s Hong Kong listing this year. But Kors may struggle to keep up the pace of growth.

Olympus’ ex-CEO no shoo-in for post-scandal return

December 7, 2011

Michael Woodford wants to his job back at the Japanese group now that those accused of covering up investment losses have left the board that fired him. But the same board hired him, and he only ran the company for six months. Olympus shareholders should make sure to look around.

Fed needs better PR on last-resort lending, too

December 7, 2011

The U.S. central bank is working on its monetary policy communications. But its key role as a crisis lender is also in the spotlight over a $7.8 trln number that has been mischaracterized by some news outlets. The Fed would get less flak if it managed this message better as well.

Don’t boo U.S. football’s zero-coupon perpetuals

December 7, 2011

The Green Bay Packers are selling shares that pay no dividend and can’t be sold. What sounds like a sucker’s bet - or a donation - at least gives fans a tangible stake in the local champs. And as it happens, since the team’s last sale, plenty of “real” stocks are down.

Corzine apology little better than Fuld’s defiance

December 8, 2011

The ex-CEO of defunct MF Global told Congress he regrets the loss of money and jobs. But his prepared statement is also full of dubious excuses that are hardly better than Dick Fuld’s blame-game tactics. Wall Street bosses still haven’t learned to take responsibility.

Latin America gets closer even as Europe cracks

December 8, 2011

Cross-border deals among South American companies, like Chilean CorpBanca’s purchase of Santander Colombia, set a new record in 2011. A single Latin currency seems remote given the euro’s woes. But as the region’s private sector consolidates, it can’t be ruled out for ever.

Spanish banking sector to pay for its sins

December 9, 2011

Banco Sabadell is taking troubled lender CAM off Madrid’s hands, and Spain’s bank-backed deposit guarantee fund is helping by making a big capital injection. Such deals minimise the cost to the taxpayer, but aren’t a free lunch for the state and won’t solve the sector’s problems.

Canaries in Q4 earnings coal mine looking sickly

December 9, 2011

DuPont and Texas Instruments now expect weaker fourth quarters. Both say customers in most sectors are reducing inventory to be conservative and raise cash. U.S. multinationals’ earnings have been surprisingly robust – but these bellwethers suggest that may be changing.