Commantators

Keeping it in the family

Seven years after the death of Gianni Agnelli, the leadership of Fiat is back in
the hands of "the first family in the Italian motor industry", says Robert Lea in The Times. The carmaker's new chairman is John "Jaki" Elkann, an American-born grandson of Agnelli - the godfather of the post-war Italian industrial economy. Whether or not Elkann possesses his grandfather's political talents, he can't be faulted for
the thoroughness of his 13-year apprenticeship as heir apparent, which included a stint making headlights in Poland. He also ran the Agnelli family investment empire, which includes Juventus football club, and the Corriere della Sera and La Stampa newspapers.







IMF bank reforms need more welly
Nils Pratley
The Guardian


The International Monetary Fund seems to have a sense of humour, says Nils Pratley. Its proposed levy on excessive profits and pay is to be called the "financial activities tax", or FAT for short — a nod surely to the many fat cats still purring around the banking system. The fund has certainly picked a good moment to unleash its proposals: Goldman Sachs has just announced a 90% leap in profits and restored its bonus pool to 43% of revenues; other banks will no doubt follow. The IMF's second measure - dubbed the "financial stability contribution" - is a levy to pay for the cost of future government support for the financial sector. But here again there is a twist: insurers, brokers and hedge funds could also be included. "Unfortunately for them, there has to be a mechanism to prevent banks from dressing up in new clothes to dodge taxes." This report is "a big step in the right direction", but solving the "too big to fail" problem requires more than heavier taxation. We need real structural reform to accompany these tax changes.





Aviva hammers its nail into the pensions coffin
David Wighton
The Times


The not-so-slow death of the final-salary pension scheme continues apace, says David Wighton. All but a handful of large employers in the private sector have now closed their schemes to new recruits. "Now comes the more drastic phase two: closing schemes to everybody." Aviva (the former Norwich Union) is the latest to go the whole hog, disadvantag- ing more than 7,000 of its longest servers. As one of the leading players in Britain's pensions industry, Aviva's decision to pull the plug is particularly poignant. Among the big beasts of the financial services industry, only Barclays had gone this far - until now. Aviva's scheme was eye-poppingly generous: employees made no contributions, retirement was at 60, and benefits were clocked up at speed. Terms were recently toughened up, but even then its pension deficit kept ballooning. Meanwhile, newer recruits on inferior deals could only look on in envy. The new arrangement will certainly be fairer. "But capitulation by a company of Aviva's stature can only hasten the coming stampede.**





Black Swan is back with a vengeance
Allister Heath
City A.M.


One of the most powerful lessons in life is that unexpected events always tend to derail even the best and most carefully thought- out plans, says Allister Heath. This week we saw three major disruptions to received wisdom, and all will have severe consequences. The first was Nick Clcgg's victory in the first election debate, with all the implications that has for a hung parliament. The second was the "horrible realisation" that a volcano in Iceland could cripple the airline industry, disrupt freight and put in question the easy movement of people. The third was the SEC's decision to accuse Goldman Sachs of fraud - a move that "shattered the widely held view that a new, relatively reasonable settlement was going to be struck between politicians and the financial system". All these stories qualify as "Black Swan events", to use Nassim Taleb's phrase: they are unexpected events of large magnitude with important consequences. And in all three cases, "markets have been caught off guard - and have still not understood the magnitude of what is happening". When will we learn?