Italy’s Zombie Politicians Have Crossed The Atlantic

By Matthew Melchiorre – For nearly 50 years before the early 1990s, one-party rule in Italy meant huge concessions to special interests, especially unions and professional guilds, to keep the peace in Parliament and thus keep Italy’s sizeable Communist Party from exploiting partisan disagreement to gain support.

One of the guilds’ most glaring protectionist achievements is the scarcity of taxis in Italy’s capital. Rome has less than a third fewer taxis per resident than London or Paris, because the Italian taxi guild lobbies and strikes to keep taxi licenses to a minimum and competition non-existent. When Monti introduced modest liberalizations to Italy’s taxi sector in January, drivers protested by blocking roads all over the country. more> http://tinyurl.com/af54g7q

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JPMorgan faces sea of trouble resolving “Whale” probe

By David Henry and Emily Flitter – The fallout from a nearly $6 billion trading loss at JPMorgan Chase & Co looks like it will haunt the big U.S. bank and its high-profile chief executive, Jamie Dimon, for months to come.

The situation presents several challenges to U.S. authorities: the potentially irregular trading occurred in London; and it was carried out by non-U.S. citizens, such as French national Bruno Iksil, who became known in the market as the “London Whale” for the size of his positions.

That translates into different rules for different jurisdictions and could raise extradition issues if any individuals are charged. more> http://tinyurl.com/9pj4sem

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Libor review is shrouded in secrecy

London – Some places always take a good picture – London (Photo credit: @Doug88888)

By Liam Vaughan – Every two months, representatives from the world’s largest banks meet at an undisclosed location to review the London interbank offered rate.

Who sits on the British Bankers’ Association’s Foreign Exchange and Money Markets Committee, the body that governs the benchmark for more than $300 trillion of securities worldwide, is a secret. No minutes are published. The BBA won’t identify any members, saying it wants to protect them from being lobbied. more> http://tinyurl.com/8zb3qfo

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Libor’s Risks Emerged From Clubby London Banking Culture

By Sean Vanatta – Libor represents the cost of one large bank borrowing unsecured funds from another, in various currencies and at varying maturities, in the London market. Each day, the British Bankers’ Association asks a panel of market participants, “At what rate could you borrow funds, were you to do so by asking for and then accepting inter-bank offers in a reasonable market size just prior to 11 a.m.?” The answers are then compiled and published by Thomson Reuters Corp.

In recent months it has become clear that many bankers misreported rates, either to benefit trading positions or provide a false picture of stability to regulators, undercutting the market function Libor was meant to perform. more> http://tinyurl.com/9t63o7r

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