Comment, analysis and other offerings from Tuesday’s FT,
William Cohan: Goldman Sachs: the case for the defence
Let us now praise Goldman Sachs, for the sole reason that it and it alone among the major, capital-intensive Wall Street institutions — both recently deceased and still living — actually understands something about risk and risk-taking, writes Cohan, a contributing editor at Fortune and author of ‘House of Cards: a Tale of Hubris and Wretched Excess on Wall Street’.
Peter Mandelson: Europe needs action, not quiet consensus
The fall of the Berlin Wall 20 years ago marked a watershed in European history. It also, in retrospect, marked the beginning of the end of Europe’s unquestioned global influence, writes Lord Mandelson, UK secretary of state for business. As Asia and Latin America have risen, the proportional influence of even the largest European states has shrunk. As if to make the point, the American president marked the anniversary of the fall of the Berlin Wall by going to … China.
Editorial comment: Soaking the rich
Senator Carl Levin, Democratic chairman of the Senate armed services committee, was recently asked about the cost of the war in Afghanistan. With US public finances already overstretched, the Obama administration is expected to commit new forces soon — at an additional cost of $1m a year for each soldier. Where will the money come from? Take a guess. Mr Levin wants an “additional tax to the upper brackets, folks earning more than $200,000 or $250,000″. They can afford it, he explained: “They have done incredibly well.”
Lex on Banks’ capital
“Repeat after me: banks need more capital and better quality capital”. The post-crisis regulatory mantra has been accepted almost universally. But the tricky process of determining what that means is just beginning. It is likely to mean further capital raising by banks globally — not just because, as the head of the IMF said on Monday, there are substantial bank losses still to be revealed. Capital itself remains a moving target.
José Manuel González-Páramo: Insight – Rejuvenating the ABS sector
The extraordinary measures undertaken since the start of the crisis by the eurosystem, that is, the European Central Bank and the 16 national central banks of the euro area, have proven key to mitigating liquidity risk in the banking sector and avoiding a collapse of the money markets in the eurozone. Central bank liquidity, however, cannot be a sustainable funding source for the ABS market, writes González-Páramo, a member of the executive board and governing council of the European Central Bank.
Gapperblog: Starwood brings a touch of China to Sheraton
There are sometimes doubts about US brands overseas and whether they enjoy the same influence and respect as they do at home. I wonder, however, whether the opposite is a bigger worry. The thought is prompted by talking to senior executives of Starwood Hotels and Resorts, the US hotel chain that owns brands including Sheraton, Meridien, W, Westin, and St Regis.
FT Video on the Spanish property crash
The collapse of Spain’s housing market, and the financial crisis have combined to drive some property companies into bankruptcy. Mark Mulligan, Madrid correspondent, reports from Spain on why investment in the commercial property sector is like a game of monopoly.