Some highlights from Monday’s FTfm.
Indemnity plan could cost €28bn
Europe’s asset management industry faces a bill of as much as €28bn to fund a continent-wide investor compensation scheme demanded by Brussels. The figure is more than four times the operating profits of €6.4bn racked up by the western European fund industry in 2009, according to a consultancy report
Bond yield warning for UK companies
Half of all UK companies are heading for bankruptcy if government bond yields remain at their current levels
Bank asset managers in the line of fire
“The average unit trust has not beaten the index. But why would you invest in the average unit trust? They’re run by banks, building societies and life companies and they are seriously crap,” said Peter Hargreaves, chief executive of the wildly successful Hargreaves Lansdown. Steve Johnson looks at the evidence
The SEC’s plan sets lawyers abuzz
The Securities and Exchange Commission plans to scrutinise fund fees by investigating advisers that charge what it deems to be excessive fees. This has raised questions among industry lawyers.
Returns from private equity questioned
Returns from private equity are not as high as the industry claims, largely because they come from using borrowed money to finance buy-outs and from stock market gains, according to a recent report
Why some housing bubbles remain
Some housing bubbles — such as in the UK, Spain and Australia — remain, and are a potential source of vulnerability to the global financial system, says Edward Chancellor
Big Mac index gives more than a taste of true worth
An examination of the theory of purchasing power parity could provide clues to the future direction for emerging market currencies, but most observers agree the trigger for a freeing of emerging market currencies will be inflation. Countries such as India, Thailand and Taiwan have raised interest rates this year in an attempt to stem inflation. Exchange rate appreciation is another tool that could help achieve the same aim