Comment, analysis, and other offerings from Friday’s FT,
Martin Wolf: Bob Diamond’s unconvincing defence
Talk is cheap. Action is expensive. But Bob Diamond’s inaugural Today Business Lecture was clever talk, the FT columnist writes. The chief executive of Barclays, one of the UK’s iconic banks, sought to convince his BBC radio audience that the banks are dedicated to supporting economic growth, by taking risks on behalf of businesses, big and small. No doubt, he believed every word. But should you? No.
Philip Stephens: A Murdoch dynasty that is never to be
There was something truly rotten in the state of Wapping, says the FT columnist. Each turn in the tale of criminality masquerading as journalism at Rupert Murdoch’s News International defies a natural assumption that by now we must surely have heard it all. The damage will outlive the founder of one of the world’s richest media empires. The octogenarian Mr Murdoch presides over the dynasty that is never to be.
Markets Insight: Cogs of China’s credit machine are grinding more slowly
In the autumn, the great Chinese credit machine began to slow dramatically, the FT’s Henny Sender says. Beijing’s recent tight money policy has given rise to ever more money games, speculation and corruption, though the effects are only now beginning to become evident. Such money games have become a big threat to China’s prosperity and to its social harmony. These games are symptomatic of a society where everyone is on the take, looking for short-cuts.
Inside Business: Smirks about Italy miss deeper truth
The nearer Silvio Berlusconi moves to the exit, the clearer it becomes that he is an expression of the problem rather than the problem itself, writes the FT’s Paul Betts. Commentators excitedly speculate on possible successors. But in truth it is too much to expect that any one politician possesses enough power, charisma or courage to ram through the change Italy needs, from the top down.
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Analysis: Greece — a hard puzzle to solve
At the Brussels headquarters of the Commission, the EU’s executive arm, officials are torn between the need to ready contingency plans for Greece leaving the euro and the fear that this would fan speculation about whether Italy or Spain – now the front line of the crisis – might also be heading for the exit, the FT’s Joshua Chaffin reports. Just the perception of such a possibility could make euros in these countries less valuable than those in a stronger member such as Germany, economists warn, potentially triggering bank runs across the continent.
Lex on the asset side
Thank goodness there are two sides to a balance sheet, Lex says. While there is no question that the developed world is groaning under too much debt, the boom years created some serious wealth. If Mario Monti, the former European commissioner, becomes Italy’s next prime minister, he can take some comfort from the fact that although his government is deep in the red, his country overall is still one of the richest in the world.
Gavyn Davies’ Blog: Does the ECB really have a silver bullet?
In recent days, a chorus of investors has argued that only one institution, the ECB, now has the firepower needed to solve the eurozone’s debt crisis, the FT blogger writes. That firepower consists of newly printed money, which is viewed as being almost limitless in scale. Like the “big bazooka” which went before it, the ECB’s silver bullet is a much more problematic instrument than the markets want to believe.