The Great Debate UK
from Breakingviews:
Europe’s banks will suffer less from U.S. tax
-- Margaret Doyle and George Hay are Reuters Breakingview columnists. The opinions expressed are their own. --
European banks should suffer less than their American counterparts from the Obama administration’s proposed bank tax. The president’s proposed levy on banks’ wholesale funding requirements will hit all banks with a big presence on Wall Street. But assuming that U.S. banks will be taxed on their worldwide operations, the levy will hurt them more. This could be a major bonus for European investment banks -- as long as their own governments don’t follow suit.
The levy would still hurt European banks with big operations in the United States. Take HSBC, which has total U.S. liabilities of $391 billion. Even allowing for an estimated $104 billion of government-insured deposits and equity, which are exempt, this still leaves $287 billion of liabilities that will be taxed. Assuming a levy of 15 basis points, the charge will cost HSBC $430 million a year. That’s about 8 percent of the bank’s pre-provision operating profits in North America, according to Morgan Stanley.
HSBC is particularly exposed to the tax because it has a large U.S. consumer finance subsidiary, which is barred by regulators from collecting deposits. European banks with U.S. retail operations, such as Spain’s BBVA, should fare better because they have more deposits. But large European players on Wall Street, such as Deutsche Bank and
Credit Suisse, are investment banking subsidiaries with minimal deposits. They are probably facing a similar hit to HSBC.
from Commentaries:
Aegon raises money to repay the taxpayer
LONDON, Aug 13 (Reuters) - As stock markets rally, a chief executive's thoughts turn to getting the government off the shareholder register.
The strongest U.S. banks have already shrugged off the TARP, with its tiresome restrictions on executive pay. In Britain, Lloyds Banking Group has toyed with a jumbo capital raising as a way off the hook of the British government's fiendishly complex asset protection scheme.
from The Great Debate:
U.S. should batten down the TARP
-- James Saft is a Reuters columnist. The opinions expressed are his own --
The U.S. faces a lengthening series of request from industries and interests seeking shelter under the Troubled Asset Relief Program, most of which it should dismiss out of hand.
YRC Worldwide, a large trucking company, told the Wall Street Journal it will seek $1 billion in TARP funds to help relive it of its pension obligations.
from The Great Debate:
Goldman’s TARP out: give up ALL state aid
-- Jonathan Ford is a Reuters columnist. The views expressed are his own --
Goldman Sachs wants to do its duty by the American people and give them their TARP money back. Some spoilsports have urged the government simply to say no because allowing the investment bank to repay the cash would make other banks look bad.
But this seems rather un-American. Why shouldn't taxpayers get their money back if Goldman really doesn't need it? The point to insist upon is that they get all of it back -- and on commercial terms.
from The Great Debate:
First 100 Days: Fix the banks
-- Peter Morici is a professor at the University of Maryland School of Business and former Chief Economist at the U.S. International Trade Commission. The views expressed are his own. --
For every new president, campaign promises and inaugural idealism must give way to the hard choices that measure the mettle of their leadership.
from The Great Debate:
Light at the end of the tunnel
-- John Kemp is a Reuters columnist. The opinions expressed are his own --
After more than a year of denial, misdirected policies and a steadily worsening outlook, the past fortnight has witnessed a marked improvement. For the first time, there are reasons to be cautiously optimistic that the economy faces a recession rather than a prolonged slump, and recovery could get underway in H2 2009.
Markets share some of that optimism. The Dow Jones Industrial Index has risen 15.5 percent over four consecutive sessions, the most sustained rally since April 2008. It is not yet time to break out the champagne. But there are reasons to start looking through short-term weakness to focus on an eventual, albeit modest, recovery by the end of next year.
