Comment, analysis and other offerings from Wednesday’s FT,
Paul De Grauwe: Economics is in crisis: it is time for a profound revamp
The professor of economics at the University of Leuven writes: There can be little doubt. The science of macroeconomics is in deep trouble. The best and the brightest in the field fight over the most basic problems. Take government budget deficits, which now exceed 10 per cent of gross domestic product in countries such as the US and the UK.
John Kay: Too big to fail? Wall Street, we have a problem
Any engineer will tell you of the importance of making complex systems robust. You need inspections to prevent failure, to be sure: but since failures are inevitable it is equally important to try to ensure that the consequences of such failure are contained.
Sallie Krawcheck: Research conflicts point way for ratings agencies
The former chief executive of wealth management and chief financial officer at Citigroup writes: At midnight on Sunday, portions of the sweeping US equity research settlement, put in place with great fanfare after the conflict scandals of the dotcom bubble, expire. There are clear lessons from the settlement that regulators and the industry should apply now — particularly concerning how ratings agencies are treated.
Editorial Comment: New dawn in land of the rising sun
Taro Aso, Japan’s prime minister, on Tuesday dissolved parliament, paving the way for an election on August 30. By doing so, he has almost certainly signed his own political death warrant.
Lex on an Italian real estate fund
Italian real estate developer Risanamento has a predilection for grand projects and sweeping statements. Among its more visionary developments is a massive 1.2m sq m city-like project on the outskirts of Milan.
Luke Johnson: Leaks have got out of hand
The chairman of Channel 4 and runs Risk Capital Partners, a private equity firm, writes: When I first served on the boards of public companies, 20 years ago, leaks of confidential information were rare. But now it seems almost everyone is willing to spill the beans. And it means running a business with a public profile is harder than ever.
Lombard: Lloyds a challenge even for a banking paragon
Lloyds Banking Group seems to be struggling to find the perfect candidate to be its chairman. It should think itself lucky to have viable candidates at all. This is one strictly for aficionados of poisoned chalices.
Insight: Joe Quinlan on the perils of de-globalisation
The hief market strategist, global wealth & investment management for Bank of America, writes: The rally since March in global equities has been underpinned by the massive policy response from governments round the world. How ironic, then, that the very policies promoting global growth — fiscal spending, tax breaks, bank bail-outs, etc — could ultimately be diluted by government initiatives supportive of protectionism.