The Financial Pages: What the leading financial papers’ leading editorials have to say.
The Financial Times’ editorial page today covered possible budget cuts for Britain’s judicial system; the recent Gulf of Mexico oil rig explosion; and Russia’s entry to the WTO.
Britain’s judicial system should not be subject to the inevitable public spending cuts that will follow in the coming Parliament, argued The Financial Times. Both the Conservative and Labour parties have proposed reducing the cost of justice by encouraging magistrates – unpaid volunteer judges who operate without juries in minor criminal cases – to try a number of crimes that are currently tried before a judge and jury. The judicial system, on its GBP £6.7 billion budget, is already fiscally lean and any savings that could be squeezed from it would be insignificant and would pale in comparison to the savings that could be taken from healthcare and education, claimed the paper. Moreover, “in a well-run liberal democracy, a fair and openjudicial system is the most important front-line service. The integrity of the court system must not be undermined at any price.”
The explosion on the Deepwater Horizon rig in the Gulf of Mexico, said The Financial Times, is a tragedy in the loss of 11 workers’ lives, as well as a reputational disaster for British Petroleum. Although BP’s safety performance has improved under its new CEO, Tony Hayward, it is crucial that the company, and the deepwater production industry as a whole, learn safety lessons from the investigation into the explosion that will now follow.
Russia appears to be back on track with its application to enter the World Trade Organisation, said The Financial Times. Last June, Russia withdrew its application, preferring instead to form a customs union with Belarus and Kazakhstan, but it has now reversed that decision. And that, claimed the paper, is good news. “Managed well, a Russian WTO membership would benefit both Russia and its trading partners. The trade body’s rules would strengthen foreign investment and trade bonds.”
The Wall Street Journal‘s editorial page today looked at the worrying rise in Chinese property process; yesterday’s US Senate hearings for Goldman Sachs; and the International Criminal Court.
The recent rise in Chinese property prices is, claimed The Wall Street Journal, a symptom of dysfunctional banks. Chinese regulators, concerned about the prospects of a property bubble, have reacted by imposing stricter limits on bank lending for property investments. But, said the The Wall Street Journal, “it’s doubtful whether such measures can succeed in preventing a bubble if the amount of available credit in the economy continues to grow.” Broader banking reforms, said the paper, would be a better way of reducing the risk of a crash.
Senate failed in its attempt to grill Goldman, WSJ says. Photo credit: Sjoerd van Oosten
Yesterday’s hearing of the US Senate’s Permanent Subcommittee on Investigations – prompted by a Securities and Exchange Commission lawsuit accusing Goldman Sachs of fraud – left The Wall Street Journal decidedly underwhelmed with the Senators’ performances. “We’re not sure which of the politicians at yesterday’s Senate hearing did the most to confuse spectators,” said the paper. Some of the Senators appeared not to know the difference between a market-maker (the person or entity that offers prices at which a client can buy or sell an asset) and an investment adviser (the person or entity whose acts in the interests of a client as a fiduciary). “In sum, it appeared to be another bad day for the SEC’s specific case against Goldman.”
“Step by tentative step,” claimed The Wall Street Journal, the Obama Administration is getting closer to embracing the International Criminal Court. “Color us sceptical,” said the paper. What’s so bad about the ICC? For one, the court is steeped in the doctrine of universal jurisdiction, allowing it to adjudicate crimes committed anywhere in the world. Moreover, unlike other international measures taken to stop atrocities and supported by The Wall Street Journal, the ICC has neither a narrow mandate nor a limited lifespan. “The U.S. may not be able to stop the latest U.N.-style bureaucracy from rising, but that’s no reason to invest American credibility and resources in this project.”
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