An emerging crisis
Raghuram Rajan, the highly regarded governor of India's central bank, said this week that it was time developing countries' role in rescuing the global economy was recognised in Washington. "International monetary co-operation has broken down," he grumbled as the US Federal Reserve continued to turn down the dial on quantitative easing (QE), thereby doing nothing to ease currency worries in many emerging markets, including India.
Did co-operation on monetary and fiscal policy ever exist? Up to a point, it did. It was briefly but firmly displayed at G20 level in 2009 as leaders confronted the size of the financial crash.
But the US also adopted QE on a massive scale out of self-interest. Similarly, the huge Chinese spending stimulus in 2009 was launched to keep China's economy growing at a safe speed. The combination was good for avoiding economic calamity, but a temporary alignment of interests should not be confused with principled co-ordination.
The US Fed cannot be expected to abandon its softly-softly retreat from QE just because a reduction in monthly asset purchases from $75bn (£45.6bn) to $65bn contributes to woes in Turkey and Argentina.
Arguably, it would be more dangerous for everybody in the long-run, including emerging countries, if the Fed kept its foot to the floor.
But Rajan would have been right to bemoan a separate failure of global co-ordination in the area of banking reform.
Shadow banking has exploded in Asia, especially in China, where the outside world crosses its fingers and hopes failing funds will continue to be quietly bailed out by the state.
Eurozone leaders are still in semi-denial about the lack of capital in their banking system, a problem that will intensify with a dose of deflation or near-deflation.
The relevant question is whether the financial system has been sufficiently reformed and re-capitalised to cope with shifts in currency markets that were bound to arrive one day. It is hard to be optimistic.
Bank of England governor Mark Carney, in his capacity as head of the international Financial Stability Board, spoke last September of "uneven progress" in recapitalising banks and said financial institutions "need to improve risk disclosures further". That was alarming. And it is doubly alarming to hear that a relatively minor adjustment in US monetary policy, which was trailed in advance for months and was born from stronger US economic data, is already generating accusations of unfair tactics. This crisis in emerging markets is starting to look serious.
Can BT and BSkyB, supposedly now fierce footballing foes, prosper at the same time? The share prices currently say so, and so do the numbers. BT yesterday achieved its first quarterly rise in revenues since 2009, helped in part by a 6% rise in consumer revenues, the first increase in a decade. Some 2.5 million customers for BT Sport looks to be a decent result, even if some viewers are paying nothing extra.
Over at BSkyB, chief executive Jeremy Darroch can afford to be lofty about his "noisy" rivals while shouting about some of Sky's gains, like growth in broadband, a new deal with HBO and the number of customers opting for "connected" high-definition boxes.
Jolly good, but the battle between the two companies is at the phoney stage. The action becomes serious when the next set of Premier League rights go up for auction, likely to be towards the end of this year or early next. Premier League bosses will be salivating.
BT, having bagged the rights to Champions League and Europa League football from 2015/16, has surrendered any element of surprise in its bidding tactics. It is plainly hugely ambitious for BT Sport, seeing an opportunity to capitalise on its investment in fibre broadband. At Sky, for all the legitimate boasts about the increased diversity of viewing habits, executives cannot be sure how their business would behave if top-tier football were reduced to a walk-on role.
Both sides will already have a good idea of the price they are prepared to pay to secure the best Premier League packages of games. But, to appreciate quite how intense the bidding could become, consider some calculations by media specialists Enders Analysis last year. The UK TV industry currently generates revenues of £12bn from a programming budget of £6bn. Champions League football, currently on Sky and ITV, comprises about 0.3% of total audience over a full year. But BT was willing to pay £300m a year for those rights – or £100m per 0.1% share of total viewing. "Were all TV to cost that much we would be looking at annual programming spend of upwards of £100bn," said Enders.
Of course, all programming does not cost that much, and BT has the excuse-cum-explanation that is building for the long-term. Even so, the risk is high that either BT or Sky does serious financial damage to itself by over-paying.
Lloyds cuts credibility
Every aspiring financial journalist is taught Hutber's Law, established by Patrick Hutber, City editor of the Sunday Telegraph in the 1960s and 1970s. It states that "improvement means deterioration".
It came to mind this week as Lloyds Banking Group said it would "cater more effectively" for the needs of its business customers by removing 520 business relationship managers, a fifth of the total.
Lloyds will struggle to convince small businesses that the cuts are to their advantage. Almost every survey in this area points to a consistent theme. Owners of small businesses want a relationship with an individual at their bank. They go in fear of being treated as an item on a spreadsheet.
Business secretary Vince Cable is not persuaded by Lloyds' pitch and has summoned the boss. Quite right too.
Hail to the King
Justin King, departing chief executive of Sainsbury's, has had enough praise already this week, but he deserves one more clap for waiving the £1.7m severance payment he was contractually entitled to claim. A contract that is so generous to an executive who leaves voluntarily is, of course, silly. If a company is not asking the boss to quit, why should it pay him or her to do so? But there are still plenty of similarly-styled contracts around, and executives who are prepared to collect their entitlements. Richard Meddings, finance director of Standard Chartered, resigned last month saying "it was totally my decision to leave". He will depart in June but be paid a salary, pension contribution and other benefits until next January because that's what his contract allows. King, let's hope, has established the precedent that a contract does not always have to be obeyed.
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