Comment, analysis and other offerings from Thursday’s FT,
Martin Lukes: Notes from the inside
Lukes refuses to let prison bars get in the way of his burning ambition to give the closing keynote speech at Davos. He is former chief executive of a-b glöbâl, and was incarcerated in Florida for insider trading.
Arvind Subramanian: It is the poor who pay for the weak renminbi
China’s exchange rate policy has largely been viewed through the prism of global imbalances, says Subramanian, senior fellow at the Peterson Institute for International Economics and Center for Global Development. That has had three unfortunate consequences. It has allowed China to deflect attention away from its policy. It has obscured the real victims of this policy. And it has made political resolution of this policy more difficult.
Andrew Hill: Ruskin’s message for the modern merchant
A wealthy nation in thrall to a narrow economic ideology, its residents bent on self-enrichment, its business leaders adrift without a moral compass, its politicians oblivious to the gap between rich and poor: seen through the eyes of John Ruskin, today’s Britain would not have looked so different from Britain in the 1850s, writes the FT’s Hill.
Economists’ Forum: The Basel II concept leads to a false sense of security
The Basel II accord has done more harm than good for stability. In a previous post last month on the failure of financial regulation, I pointed out that Basel II has glaring deficiencies that virtually provide a navigational map to creating off-balance sheet instruments, says Michael Pomerleano, who worked at the Bank of International Settlements and at the Bank of Israel.
Lex on carried interest
Quite why private equity billionaires pay lower rates of tax than their cleaning ladies do on their wages has long been a puzzle. In both the US and UK, politicians have now got carried interest in their sights. President Barack Obama’s proposed federal budget for the 2011 fiscal year would tax carried interest earned by investment managers at the ordinary marginal tax income level of up to 35 per cent – instead of the current 15 per cent capital gains rate.
Book review: The House of Versace
The latest fashion-book entrant is House of Versace, by Deborah Ball, a Wall Street Journal reporter who covered luxury goods in the late 1990s. Although the “untold story” promised by the subtitle seems a stretch, the author’s argument for it is simple: this is the first Versace biography written with the co-operation of both Santo and Donatella. The possibility of fresh information is tantalising.
Westminster: David Davis in the running to chair Treasury Select Committee?
A curious rumour reaches Jim Pickard‘s ears: that David Davis, former shadow home affairs secretary, could have his eye on an altogether different prize – chairmanship of the Treasury Select Committee. Davis is about to chair a body called the Future of Banking Commission, set up to report to the next chancellor on how to produce a “socially useful” financial sector. It’s a far cry from his last beat of cops and robbers.
Market Insight: Owen Job – Bank reforms will fuel government bond demand
Proposed adjustments to banking regulation could provide a significant boost to demand for government bonds – a factor that seems to have been largely overlooked by the market, says Owen Job, fixed income strategist at Nomura International.