Breakingviews

Mitsubishi Motors fiasco shows reforms lack oomph

May 5, 2016

The carmaker’s legacy of dodgy testing is astonishing. At best, management and directors were in the dark for 25 years. The firm badly needs a stronger board and better internal controls. For all the talk of improved corporate governance, much of Japan Inc is similarly lacking.

Mitsubishi Motors’ VW-style crash is justified

April 26, 2016

The Japanese carmaker’s value has dropped by $3.4 bln since it admitted fiddling test data. Though uncertainties abound, that reaction doesn’t look excessive. If its cash pile halves, EBITDA drops by a quarter and already-low valuation multiples shrink, the decline is deserved.

Uber driver deal just a detour from legal showdown

April 22, 2016

A $100 mln settlement resolves claims in two U.S. states that the $60 bln ride-hailing service should treat workers as employees, not cheaper contractors. Like paying driver fines for illegal pickups, though, the pact only buys time for Uber. Eventually, there’ll be a collision.

Jamie Dimon stands up to bank breakup bullies

April 7, 2016

The JPMorgan CEO’s latest annual missive tackles everything from Brazil to Brexit. An overriding message that bigger is better in finance mostly resonates, however. A reasoned case like Dimon’s is key as the likes of Bernie Sanders and Neel Kashkari advance the carve-up cause.

Abandoned Pfizer deal leaves all sides tainted

April 6, 2016

The U.S. Treasury looks bad for changing the rules to kill the $160 bln merger with Allergan. Lawmakers’ inaction encouraged such tax-driven transactions. But Pfizer and CEO Ian Read bear the most responsibility for wasting time and resources pushing an overpriced, risky deal.

Valeant’s multiple organ failure puts it in ICU

March 21, 2016

The beleaguered drugmaker has found accounting improprieties. It is booting CEO Mike Pearson but ex-CFO Howard Schiller has refused to quit as a director. The board, the numbers and the strategy are fractured. Some $30 bln of debt means Valeant risks an Enron or WorldCom endgame.

Bank CoCos deserve all the brickbats

March 18, 2016

Deutsche Bank’s John Cryan thinks new hybrid bank bonds are flawed. Market turmoil is forcing regulators to clarify when baffled investors get coupons. Yet unless there is also standardisation of when they convert from debt to equity, CoCos will always be prone to death spirals.

American oversight of financial tech looks so 2007

March 9, 2016

U.S. regulators are falling short of policing this emerging industry, partly because of the outdated patchwork of state rules. The UK and others are further ahead in addressing the sector in fresh ways. Creating a modern, federal regime to oversee these firms is a priority.

U.S. anti-gun rulings put freer markets in sight

March 8, 2016

Courts have upheld assault-weapons bans, adding heft to a Connecticut suit that tests laws shielding firearms firms from liability. The case is still a stretch, but growing assent to gun-rights limits may force the likes of Remington to compete without unfair legal protection.

Being a UK bank boss is now just scary enough

March 7, 2016

Senior bankers now face censure for their own or subordinates’ misdeeds. Even where job titles don’t imply responsibility, regulators may be able to argue that institutional culture does. This fuzziness aside, the new regime should rein in brash boards, bosses and risk-takers.