S Korea: go slow on financial big bang
A financial big bang is unlikely to happen in South Korea any time soon, despite the government’s repeated promises to deregulate the financial industry.
South Korea’s leading brokerages are increasingly frustrated that the country’s revised Capital Markets Act aimed at fostering investment banks is now unlikely to be passed in parliament this year. Continue reading »
India’s reforms: don’t stop now
Is India right to congratulate itself — as it often does — on its prudent banking regulation? Perhaps not, or at least not quite so frequently, according to Montek Singh Ahluwalia (pictured), one of the country’s most senior technocrats and a close friend of Prime Minister Manmohan Singh. Continue reading »
Taiwan: opening up to China, bit by bit
Over the past decades, Taiwanese businesses have funneled more than $200bn in direct investment into China, but there have only been $270m worth of Chinese investment into Taiwan.
That discrepancy has been a sticking point for the Taiwan government, which on the one hand wants to attract more investments to show tangible economic benefits from mending fences with China, but on the other hand is wary of any criticism that it is letting the Chinese buy up Taiwan’s prized companies and assets. So this week’s move by the government is a significant move. Continue reading »
Poland: the race to cut red tape
Poland’s centre-right government and right-wing opposition usually find very little to agree on, which is what makes this week’s race to deregulate the economy noteworthy.
The first shot was fired by Jaroslaw Gowin, the justice minister, who has embarked on a crusade to slash the number of regulated professions in Poland. The 380 protected trades is the highest number of such jobs in the EU. Continue reading »
Taiwan’s banks: a little liberalisation
Taiwan on Tuesday opened the doors a little wider to Chinese money by announcing that Chinese banks and investors will be allowed to take small stakes in Taiwanese banks.
Taiwan’s main financial regulator announced in a statement that, from January 2 onwards, eligible Chinese banks will be able to take up to a 5 per cent stake in a Taiwanese bank, while other non-bank investors will be allowed up to a 10 per cent stake. Continue reading »
Shaken and stirred: Vitro’s bondholder face-off tests Mexico’s bankruptcy law
Bloomberg
Anyone looking for a case study in acrimonious relationships between company and creditor could do worse than look at recent events at Vitro, Mexico’s leading glassmaker.
On Tuesday, a group of Vitro’s creditors rejected a proposal to restructure almost $1.5bn in debt barely hours after a bankruptcy court-appointed mediator made the offer. The face-off is a tough test of Mexico’s new bankruptcy laws, designed to facilitate agreements between debtors and creditors. If it goes wrong, creditors say, borrowing will become more expensive. Continue reading »
India’s banks: a much-needed shot in the arm – or one in the foot?
India’s interest rate rise may have been widely anticipated, but the deregulation of savings rates was more of a surprise – and one which the market initially didn’t like: the Bombay Stock Exchange’s banking index fell over 4 per cent during trading on Tuesday.
While customers may rejoice at the extra percentage or two, the short-term effect on the banks could be negative, and of much greater magnitude. Deregulation should drive up competition and could push rates from 4 per cent into the 6 per cent range. This could spell both good and bad news for banks. Continue reading »
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