Financial markets

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In bank stress tests, what’s worse: runs or lemons (the other kind)? Lemons via

Runs versus lemons: why US bank stress tests succeeded while Europe’s failed

US regulators chose to reveal detailed information to the public about the state of the banks. They were able to be so transparent, without triggering a run, because of a strong fiscal backstop.
We need entrepreneurs with vision beyond the current reporting period.

Long-term growth is the victim of short-term buyback schemes

When Lord John Maynard Keynes wrote “In the long run we are all dead”, he was not just expressing his frustration at mainstream economists who blindly believed in self-adjusting markets. I am convinced…
He’s having a laugh: Jack Ma with the NYSE traders. Justin Lane/EPA

Alibaba feeding frenzy shows how little we have learnt

Greed is still good. Wall Street has just witnessed its largest ever stock market launch as Chinese internet giant Alibaba raised some $25 billion and watched its share price rise by 35% on its first day’s…
Fight or flight? Bankers likely to opt for the second. BK and EP

Fear of risk linked to high stress hormone in bankers

In times of financial uncertainty and crisis, high stress reactions lead to traders becoming more risk averse, which drives pessimism and further falls in finance, according to a new study. This is because…
Not at the races. Lefteris Pitarakis/AP

France’s economic sickness might defy a cure

The news from France has not been good over the last few years. Poor economic growth, stubbornly high unemployment, plant closures on the rise, strikes (not new, really), voter disenfranchisement and the…
Are high-frequency traders friends or foes of the financial market? AAP

Too fast, too furious? Making sense of high-frequency trading

As the sixth iteration of The Fast and the Furious franchise rolls out in cinemas, a greater speed demon lurks in our financial markets: high-frequency traders (HFTs). While the good guys in Fast 6 are…

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