Business Review from the Economist
European regulators seek tax visibility
The E.U. detailed plans to force big firms to open up their tax affairs. Under the scheme, companies with sales of more than $846 million a year would be required to publish how much tax they pay and in which countries, including in tax havens. Although the move has been long planned, it has been given impetus by the revelations contained in the recent "Panama papers" leak. Britain, meanwhile, is mulling a new law that would criminalize companies that failed to stop their staff assisting in tax evasion.
Nomura is poised to reduce the size of its European equities business. Reports suggest the Japanese bank may cut between 500 and 600 jobs in the region. Nomura reported a loss of $458 million in Europe for the first three quarters of this financial year. It will unveil a full restructuring plan April 27, along with full-year results, when it may also announce cuts to its operations in America.
Goldman Sachs will have to pay $5.1 billion to settle a case brought by American authorities over the mis-selling of mortgage-backed securities between 2005 and 2007. Investors lost billions of dollars through the practice, according to the U.S. Department of Justice. Goldman Sachs said it was pleased to put such "legacy matters" behind it.
Regulators told five big U.S. banks, including JPMorgan Chase and Bank of America, that their living wills — plans that would make it easier to dismember the big banks or start winding them up — did not pass muster. The firms have until October to submit new plans or face sanctions.
Britain's Competition and Markets Authority asked the European Commission to block CK Hutchison's proposed $14.9 billion purchase of O2, a rival mobile-phone operator. The deal, which would reduce the number of mobile networks in Britain from four to three, would be bad for consumers, the authority said.
Italy approved a plan that would see a consortium of the country's banks, insurers and pension firms set up a $6.2 billion bailout fund to help troubled lenders. It hopes that since most of the institutions involved are private, the scheme will skirt E.U. rules on state subsidies. It also said it would streamline bankruptcy procedures, a step that might help banks resolve the $406 billion of bad loans on their books, by making it easier to seize collateral.
U.S. regulators have threatened to bar Elizabeth Holmes, the founder of Theranos, a blood-testing company, from owning or operating a lab for two years. Concerns have been raised about the firm's procedures and practices.
The IMF lowered its forecast for global growth in 2016 from 3.4 percent to 3.2 percent — although that is still a shade faster than 2015. While America, Europe and the emerging world as a bloc all saw similar downgrades, the forecast for sub-Saharan Africa was pared back the most, in large part because of a gloomier outlook for oil-rich Nigeria, the continent's largest economy.
Global Politics from the Economist
Ukraine's prime minister steps down
Ukraine's prime minister, Arseniy Yatsenyuk, said he will resign as soon as the parliament finds a candidate to replace him. President Petro Poroshenko has nominated Volodymyr Groysman, the speaker of parliament, but he has struggled to gather enough support among the splintered parties to form a new government. Yatseniuk's approval ratings had fallen to single digits over his failure to attack corruption; Poroshenko's are drooping too.
Belgian police arrested Mohamed Abrini, a suspected terrorist who confessed to being the "man in the hat" in images of the attack on Brussels airport on March 22. He is believed to have played a role in the terrorist attacks in Paris last November, too. Police interrogators said he revealed that the Brussels attackers had originally aimed to strike a football tournament in France. Investigators hope Abrini's testimony can provide further insight into the network that was responsible for the terror attacks on Brussels and Paris.
Emmanuel Macron, France's economy minister, launched a movement called "En Marche!" (On the Move!), to bring liberal economic ideas into the Socialist Party. France is preparing for presidential elections in 2017 with a Socialist president, Francois Hollande, who is the least popular president in French history.
Turkey formally requested that Germany prosecute a comedian who ridiculed President Recep Tayyip Erdogan on German television. Under a little-used German law criminalizing the defamation of foreign leaders, Jan Böhmermann faces up to three years in prison for a poem that involved ludicrous sexual innuendoes regarding Erdogan and animals. Chancellor Angela Merkel has authorized a formal criminal investigation, prompting criticism from both allies and opposition politicians. The row complicates Germany's increasingly important relationship with Turkey.