There is a contradiction at the heart of legal actions piling up against large banks, including Barclays, for distorting Libor. Half the plaintiffs are complaining that the rate was kept too high; the other half that it was kept too low.
One lawsuit filed in New York by Berkshire Bank in July accuses the Libor-fixing banks of hurting lenders by artificially depressing the lending rate. As the Wall Street Journal reported:
The lawsuit effectively argues that the alleged manipulation short-changed lenders by helping borrowers pay less for mortgages and other loans.
To read the scathing condemnation of Chinese telecoms equipment suppliers fired from Washington this week, you would think we still lived in another world. In that world, telecoms networks were built by national monopolies such as AT&T, France Telecom and British Telecom, and outsiders stayed away. Read more
US national security concerns apart, China’s Huawei has one of the strangest governance structures of any multinational company: a “panel” of three chief executives each of whom rotates into the top executive role every six months.
On the issue of Huawei’s links with the Chinese military, the telecommunications equipment company has proved the equal of any western counterpart when it comes to using spin-doctors to push out a strong and consistent message that it has been maligned. But when it comes to the rotating CEOs, its founder, Ren Zhengfei (who is one of the trio), is remarkably frank that the arrangement is a bold experiment. “Even if we fail, we will not regret our choice because we have blazed a new trail,” he said in the most recent annual report. Read more
It is bizarre to come back to London after seven years in New York to find the UK struggling to launch 4G high-speed mobile services and European companies lagging the US. “If we do nothing in Europe, all the innovation will fly away,” José María Álvarez-Pallete, chief operating officer of Spain’s Telefónica, told an FT conference this week. Read more
Next week, the Financial Services Authority is due to announce tighter listing rules to deter abuses by London-listed companies. There is cause for disquiet: this week’s implosion of Bumi , the Indonesian coal-mining group part-owned by Nathaniel Rothschild, the financier, follows governance wrangles at the Kazakh-focused Eurasian Natural Resources Corporation. Read more
It is natural to regards any merger proposed by BAE Systems, the UK’s biggest defence company, with suspicion. Had it a better record of predicting its industry’s future and doing deals at the right price, it would be in less of a pickle. Read more
Mitt Romney’s presidential campaign has been a bit of a trainwreck for the private equity industry.
First, its image of being a bunch of ruthless asset-strippers has been revived by the Democrats (and even Romney’s Republican primary opponents) and now his tax affairs are casting a dark shadow.
As the New York Times reported this weekend, Eric Schneiderman, the New York attorney general, has launched a broad inquiry into whether private equity firms evaded tax by turning their 2 per cent management fees into performance fees, which are taxed at a lower rate. Read more
This weekend, NBC kicked off its expensive coverage of the London Olympics by cutting out the part of the opening ceremony that commemorated the victims of the July 7, 2005 bombings, in favour of a soft soap interview with Michael Phelps, the record-breaking swimmer. Then, when Phelps swam (and lost) the next day, it waited eight hours to televise him in action. Read more