Comment, analysis and other offerings from Monday’s FT,
Comment: James Baker – How to prevent ‘zombie’ banks
Baker, former secretary of state under George H.W. Bush and Treasury secretary under Ronald Reagan, recalls that US officials in the 1990s routinely urged their Japanese counterparts to kill their zombie banks before they could do more damage to Japan’s economy. Today, he concludes, it would be irresponsible if the US did not heed its own advice.
Lex on hedge funds
The ‘great unravelling’ goes on, says Lex. After a rare positive month, February could prove to be as ‘grotty’ as November for hedge funds. But the move towards relaxing defensive restrictions is the right decision – for two reasons. First, it acknowledges that the industry is built on mismatched liquidity. Second, flexibility on redemptions recognises that investors’ patience is not unlimited.
Tony Jackson on role of the rating agencies
The reputation of the ratings agencies is now so thoroughly trashed that their continued usefulness might seem in doubt. But reform proposals from both Washington and Brussels amount to little more than tinkering. Why is that?
View from the markets, video: Muni bonds
Fabian, managing director at Municipal Market Advisers, discusses the problems and strengths of investing in US municipal bonds.
Lina Saigo: Trapped in a vicious circle of cutbacks
UBS has a problem. The more it cuts, the more revenue it loses, which forces it to cut again. And, a bit like a man trying to cut himself out of his own clothes, if Oswald Grübel, the bank’s new CEO, hacks away too much of UBS, he could find himself rather exposed.
Wolfgang Munchau – on Europe and the credit crisis
This is no longer a banking crisis. It is a policy crisis of the first order. Speculators, once more, are getting ready to deconstruct a European edifice, as they did in 1992, but this time it will be one on a bigger scale.
Letters to the editor
- Mandelson is mistaken; he is not doing enough to help small business
- Selling the gospel of rigidity to the US is going to take considerable effort
- Abolishing financial incentives will create a stagnating society