A Weekly Digest of The World's Financial Press

Forbes

On regulatory moves to monitor Americans through

their bank accounts

WASHINGTON wants your bank to spy on you. Four federal financial regulatory agencies have proposed "know your customer" rules that would force every bank to "determine its customers' sources of funds; determine the normal and expected transactions of its customers; monitor account activity for transactions that are incon-sistent with normal transactions; and report any transactions of its customers that are determined to be suspicious". Ostensibly this programme would help fight crime. In reality, it is a Soviet-style intrusion into your privacy. Who says the era of big government is over?

[As one Republican representative is] correctly pointing out, the government should have access to this kind of information only under a search warrant.

Steve

The Economist

In the search for stability, deflation is as much of a worry as rising prices

THE world economy is precariously lop-sided. Even as America's economy continues to surge, much of the rest of the globe is drifting towards deflation. It is scary that America's boom, fuelled by an unsustainable stock market, is now the main prop for global demand. For how much longer? Global deflationary pressures are already choking American profits, making its share prices look ever more overvalued. This could yet topple the stock market. No wonder American policy makers are urging Japan and Europe to reflate.

Most economists believe that a repeat of the 1930s is unlikely. Yet central banks failed to foresee either the 1930s depression or the great inflation of the 1970s. A big concern may now be that central bankers, having scotched inflation, will prove too slow to come to grips with the prospect of deflation.

Financial Times

Why banks are so profitable amid widespread criticism and increased competition

THE FACT is that customers get the banks they deserve. Competition in financial services did not begin with the arrival of those newcomers - the traditional high street clearing banks have been steadily losing market share, notably to building societies, since the 1980s. Yet the British consumer remains more likely to swap spouse than bank.

While that inertia prevails, the UK's traditional banks will get away with interest rates that are merely good enough, rather than having to match the best in the market. With such undemanding customers, Andrew Buxton's successors [as chairman of Barclays] and their opposite numbers at the other leading banks could have years of fat profits ahead of them.

20/21 February - George Graham

Business Week

Why Cor Boonstra, president of Philips, should break the electronics giant up

BREAKING up Philips would be wrenching. It's a national institution in the Netherlands. But as Philips confronts the Internet age, staying whole may be its greatest handicap. And with European stock markets close to records, the moment is ripe. Boonstra should divide Philips into its main businesses: semiconductors, consumer electronics, and lighting. Allowing each to trade separately, analysts reckon, would boost market capitalisation, now $25bn, by 30 to 60 per cent.

Scarred as he is, Boonstra can no longer avoid radical action. Cost-cutting and tinkering with production might have been right for the TV age. For the sprint-or-die Internet markets, here's betting that a few pint-sized Philips companies would run a whole lot faster than their big daddy in Amsterdam.

Stephen Baker

Wall St Journal

Why politicians do not have the right to spend America's $70bn surplus

MOST pernicious about Washington directing the use of any budget surplus is the premise that somehow all this money belongs by right to the government. Such was the mind-set in Treasury Secretary Robert Rubin's 4 February testimony to Congress. "We must save the great preponderance of projected budget surpluses," Mr Rubin said, "not consume them for tax cuts and spending programs." To talk of tax cuts as a way of "consuming" federal funds is absurd.

Republicans are now proposing a 10 per cent tax cut. It seems the least Washington can do toward letting Americans grow richer on the strength of resources best described not as a "surplus", but as the rightful private property of the individual Americans who worked to earn them.

19/20 February

BARRON'S

Wall Street's leader board is showing signs of distress

AS A postscript, we might add - in case it has escaped your notice - breadth on the Big Board has been atrocious as well.

Even on Friday, when most of the averages managed a rise of some sort, more stocks were down than up.

The same melancholy snapshot of a market obviously in distress is furnished by the tally of new highs and new lows.

On Thursday, for example, when the Dow Jones Industrial Average rose more than 100 points and both the S&P and Nasdaq posted solid advances, there were 29 new highs compared with 146 new lows.

On Friday, new lows were three times as numerous as new highs.

Forget the smiling faces, this old bull has wobbly pins.

Fortune

How the US Federal Reserve is becoming the world's central banker

WHAT IS less understood, especially in America, is how much the renewed dominance of the dollar is changing the role of the Fed. In commenting on Argentina's dollarisation debate, US Treasury officials said Argentina could do as it liked, but it would not affect the way the Fed handled its business.

In fact, Alan Greenspan is already tortured by the incompatible demands between an American asset bubble that is swelling dangerously and a global thirst for dollar liquidity in an increasingly deflationary environment.

It is hard to believe that those three interest rates cuts would have been made last fall if the Fed chairman, despite his denials, had not had one eye on the world at large. Power has a way of imposing responsibility.

Jim Rohwer

Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
Sport
The giant banner displayed by Legia Warsaw supporters last night
football Polish side was ejected from Champions League
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
News
i100(and it's got nothing to do with the Great British Bake Off)
PROMOTED VIDEO
News
news It's not just the world that's a mess at the moment...
News
Angelina Jolie with her father Jon Voight
peopleAsked whether he was upset not to be invited, he responded by saying he was busy with the Emmy Awards
News
Bill Kerr has died aged 92
peopleBill Kerr appeared in Hancock’s Half Hour and later worked alongside Spike Milligan and Peter Sellers
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
news
Sport
footballPremiership preview: All the talking points ahead of this weekend's matches
News
Keira Knightley poses topless for a special September The Photographer's issue of Interview Magazine, out now
people
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
News
i100
Sport
Mario Balotelli pictured in his Liverpool shirt for the first time
football
Life and Style
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SAS Business Analyst - Credit Risk - Retail Banking

£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...

Project Manager - Pensions

£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...

KYC Analyst, Birmingham - £200-£250 p/d

£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...

Test Manager - Banking - Yorkshire - £450 per day

£400 - £500 per day: Orgtel: Test Manager - Banking - West Yorkshire - £400-£5...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone