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By Edward Hadas
The UK central bank governor has decreed that sterling has fallen far enough. That’s easy to say, especially as Mervyn King is on the way out. But currencies fall when monetary policy is inflationary and capital flows freely. Words only slow the decline, or discredit the speaker.

Fed harder to grade than banks on stress tests

By Antony Currie
Rapped knuckles for Goldman and JPMorgan - and an “F” for Ally and BB&T - suggest the regulator is being tough. A blessing for BofA suggests a rigorous but fair system. Yet keeping both its math and many of the results secret make some of the Fed’s discipline seem more for show.

Orcel bonanza shows how far banks must go on pay

By Dominic Elliott
UBS stumped up $26 mln to prise investment-bank head Andrea Orcel from BAML - making a mockery of so-called retention packages. Switzerland may be clamping down on high pay. But it takes only one firm to perpetuate the financial sector’s compensation problem.

VW's mega-profit hides risky governance weak spot

By Olaf Storbeck
The carmaker’s 25 bln euros of pre-tax earnings are the highest ever for a listed German company. Despite a dismal European car market, current prospects are bright. But in the long term, politically charged and family-dominated governance is a source of vulnerability.

Abenomics can clear Japan’s demographic hurdle

By Andy Mukherjee
Japan’s shrinking, ageing population is a challenge to Prime Minister Shinzo Abe’s plans to reinvigorate the economy. But it need not derail them. If more women and elderly people join the workforce, Japan’s annual GDP growth could still reach 1.5 pct a year over the next decade.

Private equity at 4-and-20? Think twice

By Richard Beales
A new vehicle will open Carlyle’s funds to smaller investors, at a total cost far higher than institutions pay the buyout shop. While the firm’s long-term IRRs, after fees, are nearly 20 pct, today’s reality is less inviting. The structure could be risky for Carlyle, too.

Russia's central bank can avoid "putinisation"

By Pierre Briancon
Vladimir Putin has chosen close adviser Elvira Nabiullina to run the monetary authority. The appointment could give the president too much sway at one of Russia’s few remaining independent and competent institutions. But the ex-economy minister deserves the benefit of the doubt.
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