LONDON (Reuters Breakingviews) - Britain’s new Digital Markets Unit has a distinctively Silicon Valley vibe. A sweeping mandate and the ability to act with tech-like speed raises the risk it will emulate Facebook’s old “move fast and break things” mantra. Still, it’s an upgrade on the ponderous, court-based approaches usually followed by Europe and the United States.
LONDON (Reuters Breakingviews) - The decision to ban Europe’s banks from paying dividends this year is a strong candidate for the most maligned regulatory edict of recent years. Supervisors stopped payouts in an attempt to preserve capital amid rising loan losses and demand for credit. In the eyes of critics, they ruined the case for investing in an already-battered sector. That argument lacks evidence, however. Share prices may remain low even if restrictions are lifted.
LONDON (Reuters Breakingviews) - Anne Boden’s “Banking on It: How I Disrupted an Industry” covers all the bases of a standard startup book: breezy platitudes, neat a-ha moments, and near-death experiences reinterpreted after the fact as blessings. Beneath the banality, however, is a provocative theory of why the digital-banking model will triumph. It’s plausible, even if the book’s victorious tone is premature.
LONDON (Reuters Breakingviews) - Investors can’t be blamed for wanting to swear off polls. Once again, U.S. opinion surveys underestimated Republican support in last week’s presidential election. The trouble is investors don’t have much of an alternative. With two cycles showing clear – and now known – biases, perhaps investors just need to use erroneous polls to their advantage.
LONDON (Reuters Breakingviews) - It’s well-known that banks have failed to recruit enough women and people of colour to the upper echelons of management. Less talked about, however, is the worryingly narrow experience of the industry’s pool of future chief executives. Boards will have a tough time making the bench more technology savvy.
LONDON (Reuters Breakingviews) - Britain is falling in line with the rich world’s march towards protectionism. Prime Minister Boris Johnson’s new takeover rules, unveiled on Wednesday, mimic the tougher regimes of peers like America, France and Germany. The powers are sweeping and somewhat vague at the same time - an unappealing cocktail for bankers, lawyers and foreign acquirers.
LONDON (Reuters Breakingviews) - U.S. technology giants often paint Margrethe Vestager, Europe’s competition tsar, as a cartoon villain. The antitrust charges the European Commission executive vice-president unveiled against Amazon.com on Tuesday reveal a more nuanced picture. The Dane seems set on mitigating the effects of the company’s dominance, rather than ending it. Given widespread calls for a breakup of the e-commerce giant, that should cheer founder Jeff Bezos.
LONDON (Reuters Breakingviews) - European bank investors seem relaxed about the latest lockdowns. The STOXX Europe 600 Banks Index, which includes major lenders based in the United Kingdom and on the continent, has risen 6% in the past month, despite the introduction of quarantines in Germany, Britain and France. There’s logic to the idea that banks will be resilient, but it’s nonetheless optimistic.
LONDON (Reuters Breakingviews) - Andrea Enria and Sam Woods were right to stop banks paying dividends in March. When the pandemic struck, the chief supervisors at the European Central Bank and Bank of England, respectively, kept capital on lenders’ balance sheets instead. That policy is now out of date.
LONDON (Reuters Breakingviews) - Christian Sewing has had a surprisingly good year, but 2021 will be harder. The chief executive of 17 billion euro Deutsche Bank will most likely have to abandon his medium-term profitability target. Reviving a merger with rival Commerzbank is the most logical Plan B.