World finance big spring

The COVID-19 pandemic has escalated a long-simmering conflict between the US and China, two of the main drivers of financial globalisation 


If truth is the first casualty when war is declared, then the same goes for capital mobility when pandemics strike. This became evident on May 11, when US President Donald Trump ordered the federal pension fund – the world’s fifth-largest pension fund – to stop investing in Chinese equities. The move came in response to what the US Government perceived as persistent Chinese aggression – COVID-19 just being the straw that broke the camel’s back. “The role of the Chinese Government in purposely not disclosing what was going on during the COVID-19 outbreak has fuelled a lot of [anti-Chinese-Government] sentiment,” Charles Calomiris, a professor of financial institutions at Columbia Business School, told
World Finance
.


After a long period of integration, segmentation, driven by geopolitical turbulence, is becoming the norm


It was not the first time that the Federal Retirement Thrift Investment Board, which represents the interests of around 5.5 million federal employees through its $600bn Thrift Savings Plan, had been pressed to ste


Ever since the financial crisis eased its grip, the construction industry has been plagued with a seemingly incurable post-recession hangover. Staggering in its severity, the sharp decline in construction between 2007 and 2009 resulted in steep losses amounting to over $650bn a year according to Global Construction 2020, a significant report published jointly by Oxford Economics and UK-based consultancy Global Construction Perspectives. To put the dramatic figure in perspective, it exceeds the combined annual construction production of Germany and the UK.

The UK’s construction nosedive
Although the recession left no country unaffected by its forceful and menacing advance, some nations took more of a beating than others. Suffering a great while longer after the rest of the world had been freed from the shackles of recession, the UK seemed incapable of kicking the downward spiral for many years – and is still struggling.

So severe was the decline and its aftermath that business plummeted for the 22nd month running in December 2009, only to recover a fraction at the beginning of 2010 – and then stay more or less even until now, with subtle fluctuations.

In Jun



 


For many years, Mauro Botta had been a successful partner at the accounting giant PricewaterhouseCoopers (PwC) in California, where he was responsible for auditing Silicon Valley firms. After witnessing many cases of dubious bookkeeping, he blew the whistle on his employer in 2012, alleging conflicts of interest between PwC and its clients.

The Securities and Exchange Commission (SEC), the US regulator, did not take any action after investigating his claims. However, the case took its toll on Botta’s career. Although he had been working for PwC for nearly two decades, he was fired in what he claims was retaliation for his whistleblowing. He filed a lawsuit for wrongful termination, with the trial expected this spring. Botta does not mince his words about the accounting industry. “It’s absurd to have auditors being paid by the companies they are supposed to audit and who are also in charge of appointing them,” he said.

Conflict of interest is inherent in the system, Botta said. “Nobody would ever wonder why tax audit is done by the government, because this is in the public interest. So it is baffling that financial audit, which protects investors, has been outsourced t






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