Comment, analysis and other offerings from Monday’s FT,
In defence of financial innovation
The fact that a bubble could grow this large is a sign of imperfect financial institutions, rather than overly complex ones, writes Shiller, professor of economics and finance at Yale University and chief economist at MacroMarkets LLC.
The Future of Investing, FT series: Costly cogs, misfiring machine
More than two years since the credit crisis set in, invetment managers face growing demands to justify what they buy for clients, the fees they levy and whether their vast industry serves anyone’s interest but its own. Gillian Tett and Kate Burgess investigate in the first of this series.
Tony Jackson: Confronting the “too-big-to-fail” myth
If any bank judged “too big too fail” (TBTF) cannot support itself, it should immediately be taken into resolution and its assets spread out in daylight to the highest bidder. Is this feasible? Maybe not. Perhaps the TBTFs can still block anything that would cramp their oligarchic style. But they must be confronted eventually. The longer we leave it, the more it will cost.
Lina Saigol: Rainmakers lose their swagger
The bold strategists who engineered the transforming deals that changed the corporate landscape have been replaced by executors with little more than balance sheets. Identifying an M&A banker with a real cache has become increasingly difficult. Today, it’s all about market share. And with no star individuals around, the inflated pay packets of rainmakers should come down.
Lex on electric cars
Alongside throbbing supercars, the other stars of this month’s Frankfurt motor show were noiseless electric vehicles. Has the electric car’s day finally come? The barriers remain daunting and without further big breakthroughs in battery technology, all-electric cars may remain niche products. A surer bet is the next generation of “plug-in” hybrids that use higher-capacity batteries that can be charged from external sources.
View from the Top, video: Does private equity have a future?
Dominique Senequier, chief executive of Axa Private Equity, says the private equity industry has a positive future if it can wait out the current period of deleveraging around the world. While the era of cheap debt is over for now, buy-out firms should adhere to their old business models, developed in the days when debt was more expensive.