Comment, analysis and other offerings from Thursday’s FT,
John Gapper: Where there’s a will, there’s a way
Of all the suggestions since the financial crisis erupted to rein in banks – and to curb their incentives to become “too big to be allowed to fail” - the most cunning is the “living will”. “Living will” is a misnomer, since the term means a plan drawn up by a bank for how it can be broken up if it is insolvent.
Pittsburgh should be a turning point for the poor
The G20 summit in London broke the fall, writes Robert Zoellick, president of the World Bank. In Pittsburgh, leaders must go beyond — putting in place the foundations for a “new normal” of growth and responsible globalisation. The new danger is not freefall, but complacency. Trillion dollar summits may be newsworthy, but action to rebuild the economy in a better way can endure. What will it take?
Insight: Equities carry too much risk
The banker JP Morgan was fond of saying: “I never buy at lows, I never sell at the highs, I play the middle 60 per cent.” Well, from our lens, we are well past that middle 60 per cent point of this bear market rally, writes David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates. The equity market, he concludes, is overvalued and carries too much risk right now.
Analysis: The (EU) comfort zone
As key economies in the eurozone start to recover, the benefits of single currency membership are becoming ever more apparent – but further tests lie ahead.
Comment: Markets are the best judge of bank capital
G20 finance ministers, and the Basel Committee on Banking Supervision, have called for banks’ mandated minimum capital ratios to be raised and for large banks to hold even more capital. This is an understandable reaction to the financial crisis. But, write Andrew Kuritzkes, partner of management consultant Oliver Wyman and Hal Scott, professor of international financial systems at Harvard Law School, do regulators know how much capital the banking system needs?
Lex: Europe’s new watchdogs
Here they come: Europe’s two new, all-inclusive and supposedly all-seeing financial watchdogs. One will look for systemic risks. The other will watch over individual institutions. Both will be posted at the gates of Mammon. Both have licence to bark at financial dangers, although not publicly. Even so, this is not a case of Brussels quietly legislating “straight bananas”. Europe does need pan-European regulators.
Short View, video: What central banks should be telling us
Minutes from the Bank of England and Norway’s central bank suggest a less dovish tone.This is a sign that investment decisions will become more difficult as the broad market climb could be petering out.
Online special report on the G20 summit in Pittsburgh
As G20 leaders head to Pittsburgh for their summit, see the FT’s comment, analysis and reports on the gathering and the various issues to be discussed.
News analysis: Lessors take evasive action in difficult market
The global aircraft-leasing business is facing upheaval as the industry struggles to cope with a lack of funding and an airline customer base which itself is grappling with the most severe recession to hit the aviation sector.