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Dec 16, 2014
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EU insurers’ solvency is shakier than it looks

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By George Hay

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

The capital strength of European insurers is shakier than it looks. Recent stress tests by the European Insurance and Occupational Pensions Authority found that only 14 percent of insurers fell below a baseline level of capital strength under so-called “Solvency II” reforms. That’s not the end of the story, however.

Dec 11, 2014

Breakingviews: Carney the showman risks stage-managed policy

By George Hay

LONDON (Reuters Breakingviews) – Mark Carney’s transparency
drive is a double-edged sword. The Bank of England governor has
unveiled a series of reforms that should move the UK central
bank some way from its historic position, reputedly summed up by
a former governor as “never explain, never excuse.” The snag is
that effective central banking can benefit from a degree of
secrecy and opacity.

The radical shift is to publish full transcripts of a big
chunk of the monthly meeting of the Monetary Policy Committee,
which sets interest rates. The release of this material will
have an eight-year lag. That is still a short enough delay to
make participants utter every word with the external audience in
mind, rather than letting the internal debate rage. Meanwhile,
tidy minutes of the proceedings will be published as soon as the
decision on moving or holding rates is announced.

Nov 24, 2014
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Boris should pay up but not shut up over U.S. tax

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By George Hay

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

Boris Johnson has a point about his U.S. tax bill, but he should still cough up. The London mayor objects to the fact that his dual UK and U.S. citizenship means he has been issued with an American tax bill, and he says he won’t pay. Though many U.S. expats will share his frustration, it does not warrant civil disobedience.

Nov 19, 2014
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Deutsche’s CoCo buyers are not totally irrational

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By George Hay

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

There’s method in the madness of those investing in Deutsche Bank CoCos. The German lender confirmed on Nov. 19 that it had sold $1.5 billion of so-called contingent convertible debt with a 10-year maturity, following the May sale of 3.5 billion euros of six-year paper. Buying bank debt that is written down when the share price is tumbling sounds crazy, but it might not be right now.

Nov 12, 2014
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Barclays’ forex delay looks like bad news

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By George Hay

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

Barclays is once again exposed. In June 2012, the UK bank was the first to settle claims that its staff attempted to fiddle Libor rates. It promptly lost its senior management and a good deal of its reputation. A decision this time round to hang back from an industry settlement for multiple failings in foreign exchange trading is harder to immediately assess. But it probably isn’t good news.

Nov 10, 2014
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Global banks prepare for un-level playing field

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By George Hay

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

No bank should be too big to fail. The world has taken a step closer to that admirable goal with the Nov. 10 capital proposals from the Financial Stability Board, the body responsible for global coordination of bank regulation. But the latest plan has too many national carve-outs to do much for the FSB’s other aim of establishing a “level playing field.”

Oct 29, 2014
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Deutsche Bank’s fixed income wager yet to pay off

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By George Hay

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

Deutsche Bank’s strategy is still on probation. The German group decided earlier this year not to follow Barclays, its largest European rival, in cutting back its investment bank. The bet will only pay off if the recent slowdown in bond trading is merely cyclical, not part of a structural decline. The evidence from the third quarter results is inconclusive.

Oct 27, 2014
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EU bank stress-test winners still short of capital

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By George Hay

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

Investors are turning their noses up at the European bank stress tests. Shares in the sector fell 1.9 percent on average on the morning after publication, with both banks that passed and those that failed being targeted. That’s because a clean bill of health on the test’s headline terms does not necessarily mean a lender has enough capital over the medium term.

Oct 1, 2014
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Sovereign doom loop haunts EU bank stress tests

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By George Hay

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

The euro zone’s nascent banking union was supposed to unpick the “sovereign doom loop” by which ropey banks endangered weak countries, and vice versa. Its first task was to be a rigorous test of how much capital each lender could count on in adverse scenarios. Yet the new single banking supervisor’s exercise could tighten, rather than loosen, the state/bank co-dependency.

Sep 19, 2014
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Scots’ no to independence still leaves UK in limbo

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By George Hay

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

Scotland’s landmark decision to reject independence is not the end of British uncertainty. The 55:45 split, with almost all the votes counted early on Sept. 19, leaves the UK intact. But the terms of the unionist victory introduce tensions which could yet lead to a national division.

    • About George

      "George Hay writes about the banking and property sectors. He joined from Thomson Financial News, where he was a companies correspondent. Before that he worked at United Business Media, where he was news editor of Building Magazine. He has a first in English Literature from Edinburgh University, and was nominated in two categories at the 2009 Business Journalist of the Year Awards."
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