The European Commission, in crafting a financial-transaction tax, has made a mistake in underestimating the role of market makers to buttress efficient markets, Christian Voigt writes. Policymakers see market makers as mere middlemen and therefore nonessential, thereby undermining the valuable liquidity they provide, Voigt writes.
A task force established by the Financial Stability Board plans to report by June on possible alternatives to interbank offered rates. The panel is led by UK Financial Conduct Authority CEO Martin Wheatley and US Federal Reserve Governor Jeremy Stein. It will "focus its initial work on the interest rate benchmarks that are considered to play the most fundamental role in the global financial system", according to the FSB.
Guodian Power Development is expected to offer 1 billion yuan in perpetual medium-term notes, the first such corporate-hybrid offering in China. Many companies in China are struggling with a high debt-to-equity ratio, so the deal could become a model for hybrid capital.
Two international fast-fashion retailers are continuing to expand their global footprints with new store announcements. Sweden's H&M has signed a deal to debut its first South Africa flagship in 2015, and Japan's Uniqlo will make its entry into Germany next year with a 29,000-square-foot store in Berlin.
Retail sales in Germany fell 1.4% in July after a 0.8% decline in June, according to the Federal Statistics Office in Wiesbaden, surprising economists who had predicted a 0.6% month-over-month increase. Sales were up 2.3% compared to July 2012. "Higher food prices tend to lead to a bit of downward pressure on consumption. Everything else looks positive. If you look at any business survey, there's acceleration, not deceleration, of growth in Germany," said economist Christian Schulz.