UBS exposes myth of full-service bank

By Hugo Dixon
November 5, 2012

During the long upswing, second-tier and even third-tier banks felt they needed to offer every product in every part of the world. That led to inflated costs, unethical practices and now terrible returns. Last week’s bold move by UBS to hack back its fixed income division, with the loss of 10,000 jobs, exposes the myth of the so-called “full-service” firm.

World needs healthy capitalism

By Hugo Dixon
October 29, 2012

Last week I gave a speech on “healthy capitalism” at Oxford University. Before doing so, I tried the idea out on an academic friend of mine. He scoffed at it. For him, “healthy capitalism” was an oxymoron. Five years after the start of the world’s worst financial crisis in decades, it is easy to mock capitalism. The system ran amok – leading to debt, unemployment and shrinking economies.

Euro zone doesn’t need Disziplin union

By Hugo Dixon
October 22, 2012

European leaders nudged forward plans for a fiscal union with discipline as its leitmotif at last week’s summit. But such a “Disziplin union” is neither desirable nor necessary. It may not even be politically feasible.

Spanish circle getting hard to square

By Hugo Dixon
October 15, 2012

The art of politics is about squaring circles. In the euro crisis, this means pushing ahead with painful but necessary reforms while hanging onto power.

Hugo Dixon: Crisis, what crisis?

By Hugo Dixon
October 8, 2012

The credit crisis burst into the open five years ago. The euro crisis has been rumbling for over two years. The term “crisis” isn’t just on everybody’s lips in finance. Wherever one turns – politics, business, medicine, ecology, psychology, in fact virtually every field of human activity – people talk about crises. But what are they, how do they develop and what can people do to change their course?

Euro crisis is race against time

By Hugo Dixon
October 1, 2012

Solving the euro crisis is a race against time. Can peripheral economies reform before the people buckle under the pressure of austerity and pull the rug from their politicians? After two months of optimism triggered by the European Central Bank’s plans to buy government bonds, investors got a touch of jitters last week.

Banks should learn to say “Just Go”

By Hugo Dixon
September 24, 2012

Shortly after last year’s bonus round I was having lunch with the boss of an investment firm. He told me how he heard a handful of staff had been grumbling about what, by most people’s standards, were still extraordinary pay packages. He called them into his office and told them that, since they were unhappy, they should “Just Go”.

Can EU defend supranational interests?

By Hugo Dixon
September 17, 2012

European integration tends to advance first with squabbling then with fudge. Every country has its national interest to defend. Some politicians appreciate the need to create a strong bloc that can compete effectively with the United States, China and other powers. But that imperative typically plays second fiddle to more parochial concerns with the result that time is lost and suboptimal solutions are chosen.

Spain and Italy mustn’t blow ECB plan

By Hugo Dixon
September 10, 2012

The European Central Bank’s bond-buying scheme has bought Spain and Italy time to stabilise their finances. But if they drag their heels, the market will sniff them out. It will then be almost impossible to come up with another scheme to rescue the euro zone’s two large problem children and, with them, the single currency.

How to clean the banking cesspit

By Hugo Dixon
August 6, 2012

Five years after the credit crunch erupted in August 2007, banking still looks like an industry running amok. Scandals keep tumbling out of the closet: an alleged ring of banks including Barclays that attempted to rig interest rates; money laundering by HSBC; insider tips passed by Nomura to its clients; and terrible risk management by JPMorgan, where traders have so far lost $5.8 billion.