Comment, analysis and other offerings from Thursday’s FT,

Chris Patten: Europe must focus on what works
Start from the top. Over the past half century, the European Union, the world’s largest economy, has been a spectacular success, writes Lord Patten, chancellor of Oxford university, former Conservative party cabinet minister and a former European commissioner. Today, however, Europe’s woes begin with the crisis of confidence in the eurozone – and larger worries are down the road. The sooner Europe focuses on the century that lies ahead rather than on the century in which its institutions were founded and its ideas first formed, the more prosperous, competitive and globally relevant it will be.

Raghuram Rajan: Bankers sold short by market distortions
Bankers must be heaving a sigh of relief as the shenanigans of the offshore drilling industry have drawn the attention of those targeting corporate greed, writes Rajan, professor of finance at the Booth School and author of Fault Lines: How Hidden Fractures still Threaten the World Economy. But it is unlikely their respite will be for long. Inquiries under way are bound to unearth more instances of ethically, and even legally, challenged bankers. How do we instill more social values in the industry? Or is banker greed mostly good?

Gillian Tett: Future in doubt for the New York Fed chief with a ‘scarlet letter’
Is William Dudley, the doughty president of the New York Federal Reserve Bank, going to be pushed out? That question could soon be drawing attention in the markets, writes the FT’s Tett. For as US Senate and House committees scurry to harmonise their two different financial reform bills, a change is likely to the procedure for appointing governors to the New York Fed. Dudley’s main problem is that before joining the Fed, he worked at the mighty Goldman Sachs as a senior economist. Goldman has become so controversial that a “G” in a CV is tantamount to a scarlet letter in political terms

Money Supply: Live-blogging the ratings inquiry
The FT’s live coverage of the Financial Crisis Inquiry Commission’s hearing on the credibility of credit ratings agencies has ended. But read on – a play-by-play of one of the most metaphor-enriched hearings on record is below. Testifying on “credit ratings and the financial crisis” were Warren Buffett, the billionaire investor, and Raymond McDaniel, chairman of Moody’s Corp.

Lex on rating agencies
The US and now Europe are tightening their supervision of credit rating agencies. But the agencies could have avoided the mess they are in if they had stuck to their core sovereign and corporate business. Their hand in the financial crisis stemmed from a money-grabbing drive into structured products
The goal now is to restore faith in their profession. That requires better quality work. Otherwise a public rival may be just round the corner.

News analysis: Takeover talk swirls around BP
When a whale is wounded, it does not take long for the sharks to circle. With BP floundering in the Gulf of Mexico, the market has been abuzz with talk of a takeover of the British oil group, write FT reporters. The substantial erosion of BP’s market value – its shares have fallen 34 per cent since the Deepwater Horizon rig exploded on April 20 – means the company looks affordable to rivals for the first time in decades. Technically, various oil majors could afford to buy BP, but few would know what they were buying in an industry already fraught with regulatory and political risk.

Energy Source: Engineering risk – oil spills and the financial crisis
As with any catastrophe, BP’s oil leak disaster in the Gulf of Mexico has generated a flurry of questions about what went wrong. But the big question is, how it was allowed to happen – by not only the company but also the government, regulators and others involved, writes Kate Mackenzie. So why wasn’t the risk taken seriously enough?

David Pilling: Change is finally afoot for China’s workers
Cautious support by Chinese state-owned media for the strike by Chinese workers at a Honda plant shows that Beijing is finally acknowledging the reality, that the endless supply of cheap labour is finally coming to an end – and that the Communist party has a stake in better working conditions. It may,  therefore, continue to carefully support an emboldened workforce, though it will keep a watchful eye on wage inflation, writes the FT’s Pilling. But on no account will it tolerate any hint of organised labour evolving into a political force.

Beyond Brics: New rivals emerge in Colombian election
Juan Manuel Santos and Antanas Mockus are facing a new foe as they race to the finish in Colombia’s presidential campaign – World Cup football, writes Naomi Mapstone. June 20 will be the day Colombians vote for the successor to Álvaro Uribe, the president credited with restoring security amid a 45-year war against leftist guerrillas. But it is also the day Brazil takes on Ivory Coast and Paraguay plays Slovakia, making it even less likely that the 51 per cent of voters who abstained in the first round will get out of their armchairs.

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