TheChek News Flow

Deal marks end to tumultuous few years for European food delivery group

Just Eat Takeaway.com is set to be acquired by investment group Prosus in a more than €4bn deal that will lead to the European food delivery company’s delisting from public markets.

Prosus made an all-cash offer valuing Just Eat shares at €20.30, a 22 per cent premium over its three-month high.

The move marks an end to a tumultuous few years for the Amsterdam-based group, whose shares surged during the Covid-19 pandemic but fell sharply as lockdowns ended.

Just Eat acquired US-based food ordering platform Grubhub for $7.3bn in 2021 at the height of the pandemic-fuelled delivery boom before selling it last November for just $650mn.

The deal for Just Eat marks Prosus’s most significant transaction under its new chief executive Fabricio Bloisi, who has targeted ambitious growth plans for the investment group.

In a statement, Bloisi said the Just Eat deal was an “opportunity to create a European tech champion”.

Bloisi is the former head of iFood, the Prosus-owned food delivery app that dominates his native Brazil.

He became chief executive of South Africa’s Naspers group, aiming to double the market value of its investment arm Prosus, which is also the biggest shareholder in Chinese internet giant Tencent.

Election winner could struggle to reform strict borrowing rules due to opposition in next parliament

German election winner Friedrich Merz faces serious hurdles to boosting defence spending in Europe’s largest nation after parties opposed to arming Ukraine secured enough seats to prevent an easing of the country’s strict limits on public borrowing.

Merz had signalled openness to reforming Germany’s “debt brake” to finance badly needed infrastructure investments and a Europe-wide drive to increase defence budgets, even as his Christian Democrats (CDU) officially maintained their commitment to the rule in the run-up to Sunday’s vote.

But the far-right Alternative for Germany (AfD) and the hard-left Die Linke have together won more than the 210 seats needed for a “blocking minority” in the German parliament. 

That gives them the power to prevent any amendment to Germany’s debt brake, a rule enshrined in the constitution in 2009 to limit government borrowing and keep the structural deficit at 0.35 per cent of GDP.

The same condition applies for creating a special off-balance sheet fund such as the €100bn pot announced by Chancellor Olaf Scholz in 2022 to fund an overhaul of the German armed forces after Vladimir Putin’s full-scale invasion of Ukraine.

Holger Schmieding, chief economist at Berenberg Bank, warned that Sunday’s result could create serious headaches for Merz. “At a time when it is crucial to raise spending for the military and Ukraine and ease the tax burden for workers and firms, Germany may struggle to find the fiscal space to do so,” he said.

“A failure to ramp up military spending could get Germany into deep trouble with its Nato partners. By infuriating US President Donald Trump, it would also add to the risk of a US-EU trade war,” Schmieding added.

Jan Techau, an analyst covering Germany and European defence at consultancy Eurasia Group, said: “On one of the biggest issues — perhaps the biggest issue — for the next government you have a blocking minority . . . That is a massive problem.”

Economists have warned that without a change to the debt brake or the creation of a special off-budget fund, it will be impossible to finance tens of billions of euros of urgently needed extra investment in the Eurozone’s largest economy. That includes money for crumbling transport and communications infrastructure as well as a much higher defence budget in the wake of the Ukraine invasion.

The scale of the challenge has been compounded by Trump’s return to the White House, his launch of direct peace negotiations with Russia and his threat to pull US security guarantees from Europe, which has forced European leaders to hold crisis talks on how to fill the vacuum.

Although Merz has said that he believes he can find the funds to finance investment by slashing welfare payments and stimulating economic growth, many analysts do not believe such measures will be enough.

If Merz does decide to reform the debt brake — possibly as part of an agreement with coalition partners such as Scholz’s Social Democratic party (SPD) and the Greens, both of which support reform — Sunday’s results mean that he will be forced to navigate thorny political terrain. 

The AfD, which secured a historic second-place finish on Sunday with almost 21 per cent of the vote, supports higher defence spending but is vehemently opposed to arming Ukraine and opposes altering the debt brake. Merz has also ruled out any form of direct co-operation with the far-right party.

Die Linke, which finished on almost 9 per cent, supports debt brake reform but is staunchly opposed to military support for Ukraine and higher spending on the German armed forces.

Jens Südekum, a professor of international economics at Düsseldorf’s Heinrich Heine University and an advocate of debt brake reform, described the situation as “difficult to negotiate, but not impossible”.

He said that it might be possible to negotiate a deal with Die Linke, perhaps by creating a special off-budget fund for civilian infrastructure and using around €50bn in savings from the regular budget to fund defence. 

“The problem is they will ask for a price,” he said of Die Linke. Merz could also face strong opposition from within his party to a deal with the hard-left Die Linke, he said.

Some analysts, including Schmieding from Berenberg, have argued that Merz could suspend the debt brake by declaring a national emergency, perhaps in the event of a serious deterioration of the situation in Ukraine.

But such a move would only allow a limited increase in spending for a set period. It would also risk being struck down by Germany’s Constitutional Court, which in 2023 blew a €60bn hole in the federal budget after ruling against an attempt to use pandemic-era emergency funds to pay for the green transition.

“In the easier constellation it would have just been possible for the CDU, Social Democrats and Greens to have a super majority and implement the fiscal policy that Germany needs,” Südekum said. “Now you need tweaks and twists and workarounds.”

Kremlin sees advantage in drawn-out Ukraine talks and using the battlefield to shape negotiations

President Trump’s high-speed effort to end the war in Ukraine is on a collision course with Russia’s negotiating tactics and President Vladimir Putin’s goals in the conflict.

After the first meeting in years between U.S. and Russian officials in Riyadh, the Kremlin is already preparing the ground for interminable talks ahead.

Putin tried to temper expectations last week about negotiations reaching a quick conclusion: “It will take some time. How much time it will take, I am not ready to answer now.”

For Russia, talks with the U.S. are a victory in themselves, because they help end the isolation imposed upon Moscow by the Biden administration, which had refused to engage with the Kremlin after its invasion of Ukraine in 2022.

The Kremlin has said it isn’t interested in a simple cease-fire because it is convinced the Ukrainians could use a pause in fighting to rearm. Instead, Putin wants to deal with what he calls “the root causes” of the conflict, which he has said include Ukraine’s NATO aspirations and an anti-Russian government in Kyiv.

Russian forces have been steadily gaining ground on the front line in Ukraine, and Moscow has a long history of using a grinding military advance to improve its position in negotiations. It is a strategy Moscow has employed from Syria to the talks at Yalta during World War II.

In recent days, U.S. policy appeared to be shifting decisively in Russia’s favor, with Trump blaming Ukrainian President Volodymyr Zelensky for starting the war and calling him a dictator.

But translating that shift into agreements at the negotiation table will be challenging. Putin has aims that extend far beyond the territorial gains his forces have made in Ukraine. The Russian president wants to limit the size and power of Kyiv’s military, ensure the country’s permanent neutrality and control the direction of its political future. While Trump has said he thinks it is “impractical” for Ukraine to join the North Atlantic Treaty Organization, the country’s constitution has enshrined that as a long-term goal.

“There’s a considerable amount of doubt inside the Kremlin that Trump and his people understand the difficulty or the complexity of the issues that have to be dealt with,” said Thomas Graham, a former White House adviser on Russia to George W. Bush who returned from a trip to Moscow earlier this month.

To achieve its aims, Russia might try to shape negotiations by pressing its offensive on the battlefield. Some of Moscow’s biggest diplomatic victories of the last century were clinched at the negotiating table while Russia was creating new military realities on the front line.

For years, Russia participated in negotiations over an end to Syria’s civil war while delivering to former Syrian President Bashar al-Assad small arms, air defenses and armored personnel carriers used against protesters and rebels. Moscow ultimately intervened on Assad’s side, clawing back territory for Damascus and cementing the Syrian leader’s grip on power, which collapsed late last year.

Similarly, in the final year of World War II, Joseph Stalin shifted to more hard-line demands in negotiations with British Prime Minister Winston Churchill and U.S. President Franklin D. Roosevelt as Soviet troops pushed Nazis out of Poland with increasing speed. The results had disastrous consequences for Warsaw and other Central and Eastern European countries the Soviets ruled over for nearly half a century.

“Stalin was able to improve his negotiating position vis-à-vis Churchill and Roosevelt because his troops were creating new realities on the battlefield,” said Sergey Radchenko, Cold War expert and professor at Johns Hopkins School of Advanced International Studies. “You can see the way Putin thinks in similar terms.”

Ukraine is unlikely to be very different as negotiations continue. Indeed, the position of the Ukrainians, who are expected to join talks at some point, and potentially the Americans will only worsen as Russia continues driving further west, nibbling at Ukrainian territory. Those successes have likely emboldened more hawkish elements of Russia’s military and political elite.

“As Russia’s position improves on the battlefield, the Russians are only going to up the ante,” said Samuel Charap, a senior political scientist at the U.S. think tank Rand. “I can only imagine the officers in the general staff are trying to convince Putin that now is the time to put their foot on the gas and push for maximum territorial gains.”

Meanwhile, Russia will likely be pushing for conditions similar to those that they negotiated in Istanbul at the beginning of the war. In those talks, Russia demanded that no foreign weapons would be allowed on Ukrainian soil and that Ukraine’s military would be pared down to a specific size, limiting everything from the number of troops and tanks to the maximum firing range of Ukrainian missiles.

Russia wants an end to the intelligence sharing between Washington and Kyiv, which remains unacknowledged by either side and has helped Ukraine strike at some of Russia’s most sensitive targets, said a person briefed on Russia’s positions.

As talks unfold, the U.S. has means to pressure Moscow, such as by tightening restrictions on Russia’s oil exports or sending yet more military aid to Kyiv. Trump hinted bluntly at such measures shortly after taking office, posting on his Truth Social platform that Putin had better “make a deal” and “we can do it the easy way or the hard way.”

But Trump has lately signaled that he prefers a polite conversation, and aides have been dialing back their mention of sanctions. As Trump tries to conclude a quick deal with the Kremlin, he will have two options to prod talks forward—pressure Moscow or pressure Kyiv, said Graham, now a distinguished fellow at the Council on Foreign Relations. Trump’s recent harsh criticism of Zelensky indicates that he has decided to pressure Kyiv, the easier target of the two, Graham said.

But, in addition to the complexity of negotiations, Putin doesn’t want the Trump administration to think that it can quickly dispatch Russia as a problem, move on and ignore relations with Moscow. The Kremlin perceived that was Joe Biden’s strategy when he assumed the presidency in 2021, something that only kindled resentment in Moscow, Graham said.

Under Biden and Barack Obama, the U.S. sought to punish Russia in part by limiting or severing contacts in an effort to isolate Moscow globally. The resumption of dialogue is by itself a victory for the Kremlin.

“They want to be engaged with the United States for some time,” he said. “They don’t want the United States or Trump to think that this is a matter of two or three months to get it all done, and now I just focus on China and forget about the Russians.”

The U.S. Economy Depends More Than Ever on Rich People

The highest-earning 10% of Americans have increased their spending far beyond inflation. Everyone else hasn’t.

Many Americans are pinching pennies, exhausted by high prices and stubborn inflation. The well-off are spending with abandon.

The top 10% of earners—households making about $250,000 a year or more—are splurging on everything from vacations to designer handbags, buoyed by big gains in stocks, real estate and other assets.

Those consumers now account for 49.7% of all spending, a record in data going back to 1989, according to an analysis by Moody’s Analytics. Three decades ago, they accounted for about 36%.

All this means that economic growth is unusually reliant on rich Americans continuing to shell out. Mark Zandi, chief economist at Moody’s Analytics, estimated that spending by the top 10% alone accounted for almost one-third of gross domestic product.

Between September 2023 and September 2024, the high earners increased their spending by 12%. Spending by working-class and middle-class households, meanwhile, dropped over the same period.

“The finances of the well-to-do have never been better, their spending never stronger and the economy never more dependent on that group,” said Zandi, who oversaw the analysis, which was based on data from the Federal Reserve. The analysis runs through the third quarter of 2024 because that is the most recent data available.

Taken together, well-off people have increased their spending far beyond inflation, while everyone else hasn’t. The bottom 80% of earners spent 25% more than they did four years earlier, barely outpacing price increases of 21% over that period. The top 10% spent 58% more.

A stock market selloff or decline in home values that rattles the confidence of the top 10% and causes them to cut back would have a significant effect on the economy. Consumer sentiment is starting to slide overall, including for the wealthiest third of consumers, thanks in part to tariff threats.

The buying power of the richest Americans, who Zandi said tend to be older and more educated, stems in part from the swelling values of homes and the stock market over the past several years. While rising asset prices are extolled as a sign of a good economy, they also are widening the gap between those who own property and stocks, and those who don’t.

Vivek Trivedi, 38 years old, saved up during the pandemic, and in 2022 and 2023 he bought three investment properties in the Indianapolis area, where he lives. His own housing costs are stable because he locked in a sub-3% mortgage on his primary home when he refinanced while interest rates were low during the pandemic.

He and his wife, Purva Trivedi, both work in the pharmaceutical industry. They earn more than $350,000 a year combined, about 45% more than before the pandemic. They have two small children and support his parents, who live with them.

“We’ve made some strategic moves in our own careers and also in investment portfolios,” Vivek Trivedi said. “We haven’t really had to cut back.”

Vivek Trivedi took up road cycling and bought a $3,000 bike. The couple noticed their grocery bill rising but agreed that buying organic products was too important to them to give up. This year, they are budgeting about $10,000 to $15,000 for travel, including a potential trip to their native India.

During the pandemic, Americans across the spectrum saved at record levels. They spent less because they were stuck at home and received extra money from the government’s various stimulus measures. By early 2022, households socked away an extra $2.6 trillion.

Then inflation struck, and prices rose sharply. Most Americans turned to their extra savings to keep up with their rising bills. But the top 10% of earners kept most of what they had saved up.

Affluent people also found themselves with assets, such as stocks, that suddenly were worth far more. The net worth of the top 20% of earners has risen by more than $35 trillion, or 45%, since the end of 2019, according to Federal Reserve data. Net worth grew at a similar rate for everyone else, but it translated to a lot less money: an increase of $14 trillion for the bottom 80%.

Tom Shoaf, a 61-year-old test pilot who lives in Alamogordo, N. M., estimates that his net worth is up about 40% since the pandemic. Nearly all of his assets, from a ranch in Wyoming to the stocks he holds in his retirement accounts, are worth much more now.

His wife, Kristi Shoaf, is an occupational therapist. Together they earn about $500,000 a year. They recently started giving an annual gift under the gift-tax limit, which is $19,000, to each of their two adult sons. “I had several relatives die during Covid. I thought ‘Why are we waiting?’” he said.

The couple have more than $1 million set aside to buy a new home when they retire in a few years. He bought a plane before the pandemic. A rising net worth “certainly gives you confidence to do more things,” he said.

Bank of America found that credit- and debit-card spending by their richest third of customers was growing faster than spending by the lowest-earning third. Certain categories of spending were especially robust. The top 5% of households spent more than 10% more on luxury goods abroad compared with a year earlier.

“They’re going to Paris and loading up their suitcases with luxury bags and shoes and clothes,” said David Tinsley, senior economist for the Bank of America Institute.

Delta Air Lines Chief Executive Ed Bastian last month said he expected a strong appetite for high-end travel to fuel profit this year. The airline’s sales of premium tickets rose 8%. Revenue from sales of main cabin tickets rose 2%.

Royal Caribbean said it had the best five-week booking period in its history in recent months and announced the launch of European river cruises, which are popular with a higher-end set.

“It’s an extreme bifurcation” between those companies and others that cater to poorer customers, said JPMorgan Chase analyst Matthew Boss. Big Lots filed for bankruptcy last fall. Kohl’s and Family Dollar are closing stores. “They’re all battling for fewer dollars,” Boss said.

Barbara Pierce, 57, runs a membership group, Women With Capital, focused on impact investing and philanthropy. Rising grocery prices have been a topic of discussion even among the wealthy women who participate. Pierce, who lives in Marin County, Calif., has been scaling back on takeout meals because of rising prices: “I don’t want to have a $15 sandwich.”

Pierce and her husband together bring in about $300,000 a year, largely from investment income. The couple and their teenage son went on a three-week safari to Africa in July that cost about $35,000.

“We’re spending a lot of money doing things that we really want to be able to do while our son is living at home with us,” Pierce said. “We feel like the time is now.”

She is planning to make another big purchase in the next few weeks. Mindful of potential coming tariffs, she wants to replace her 10-year-old car.

Vincent Mortier warns president risks undermining trust in the US economy

Donald Trump’s move to tighten his grip on independent US watchdogs is “a big, big mistake” that risks eroding trust in the world’s biggest economy, Europe’s largest asset manager has warned.

The Trump administration has pushed for greater control of regulators, signing an executive order late on Tuesday that “reins in independent agencies” and requires them to submit draft regulations for review.

Federal agencies must “consult with the White House on their priorities and strategic plans”, and the president will set “performance standards” for them, according to a White House statement.

Vincent Mortier, chief investment officer of Amundi, which manages €2.2tn in assets, told the Financial Times that “at the end of the day, what is working in the US is the checks and balances”.

“If everything is put under [executive power], with an agenda for deregulation, crypto, digital push — and many conflicts of interest everywhere, it is the start of the end of how . . . democracy is working. It’s quite dangerous, really.”

Mortier said the dollar and the proper functioning of US markets “is relying on one thing, which is trust”.

“The biggest threat is whenever people, in particular big foreign investors, start to question the trust,” he added.

“I don’t think that’s yet there, but there are more and more things that are done that could start to erode the trust. And at the end of the day, the US dollar status is also linked to this — trust in the US system, in the Fed, in the US economy”.

“If you think checks and balances are weaker, conflicts of interest are everywhere, fake news is developing and the reliability of the policy mix can be questioned . . . Finally, you can start to lose a little bit of trust,” said Mortier.

While conflicts of interest have always existed, he added, “now we’ve reached another level”.

Some critics have said that Trump’s executive order is illegal and will be challenged in the courts.

The White House has exempted the Federal Reserve’s monetary policy functions from its executive order, although some market participants have questioned the permanence of that decision and the central bank’s supervisory role has still been targeted.

While Trump has frequently expressed his desire to bring interest rates down, Treasury secretary Scott Bessent has said the administration is focused on 10-year US government bond yields, a benchmark rate for trillions of dollars in assets around the world.

The benchmark 10-year yield climbed to more than 4.8 per cent in mid-January, its highest level in 14 months, but has slipped lower in recent weeks as investors oscillate between concerns about inflation and expectations of slower growth under the new administration.

Mortier said the Trump administration “totally understood that if they were to revoke the independence of the Fed, it would have had some very, very, very adverse consequences — in particular on the 10-year”.

“Short term, there is no need to do it,” he added. “It’s a kind of red line in the short term, where the negative impact would have been much greater than any positive impact.

“I believe that now for the next months and years, they will try to pressure the Fed — and they’ve started actually.”

Mortier said that while he did not believe that Fed chair Jay Powell would succumb to such pressure, there was a question over what would happen when his term ended in May 2026.

Can Rivian outfox Tesla in Elon Musk’s own backyard?

Silicon Valley has found itself a new It car

Inside each of us there are two babes. Your inner “babe!” is positive, proactive and represents the extent to which you are, at any given moment, thriving. Your “babe?” side, on the other hand, encourages the kind of questionable behaviour that is likely to cause concern for your wellbeing among friends and loved ones. This duality, codified by author and podcaster Lara Marie Schoenhals, came to mind recently as I was driving down Highway 101, the concrete artery connecting the San Francisco Bay Area to Silicon Valley. Side by side in my rearview were two pickup trucks, alike in size but unalike in dignity.

One was a silvery Cybertruck, Tesla’s triangle-forward culture-war-on-wheels. Even before Elon Musk took to Washington DC like Darth Maul, the semiotics of the Cybertruck were complicated. Still, it looks exactly like a vehicle that comes with an air-filtration system called “Bioweapon Defense Mode”. It’s “babe?” incarnate.

In the next lane over was a light-grey Rivian R1T, a more-or-less conventional-looking truck given a futuristic glow-up with gently rounded edges, a huge light bar across the front fascia and headlamps arranged in a neat, vertical stack. It looked cute but capable, like a butched-up Pixar character. Total “babe!”.

Founded in 2009, California-based Rivian went public a few years ago, making history as the first manufacturer to sell consumer EV pickups. Rivian, which produces vehicles in a factory located in Normal, Illinois, struggled through a semiconductor shortage, the pandemic and quality and reliability problems during its early years. But things have stabilised since then. The company doesn’t yet sell in Europe, but plans to introduce a smaller, more Euro-appropriate SUV, the R2, likely in 2027.

In the meantime, Rivian’s first two models, the pickup and its SUV cousin, the R1S, clearly won hearts and minds in and around Silicon Valley. Teslas still abound here, to be sure. But, Cybertruck aside, there are so many of that company’s sameish-looking sedans and SUVs now that they tend to blend into the background. Rivians, whether precariously perched on driveways in the Marin Hills or stationed near the Stanford Shopping Center, seem to stand out. How, I wondered, did Rivian become the It car in Tesla’s own backyard?

There are practical reasons. Rivians were genuinely the first to do things EVs haven’t traditionally been great at. R1Ts, for example, have the adjustable air suspension and attendant off-roading equipment to rock crawl with the Land Rover Defenders of the world. They can tow a beefy 11,000lb, when properly equipped, and cart a 1,764lb payload. Plus they offer tons of optional goodies for outdoorsy types, from an air pump in the back, for inflating water toys, tyres and the like, to a handy little flashlight that pops out of the driver’s side door.

I approached a few random Rivian owners – at a trailhead and a beach parking lot – who suggested their choice to buy one hadn’t been entirely practical, before indicating they really were ready to get on with their cardio. Clearly vibes are a variable in the Rivian equation.

I contacted Carter Gibson, a friendly 34-year-old employee at Google, who lives in San Francisco and owns an R1T Launch Edition. He told me he used to be a Toyota 4Runner guy, who loved the 4x4’s dependability and capability but always felt guilty about the lousy gas mileage. Then Rivian announced the R1T, which he felt was “specifically targeted to me. They showed it going down a trail completely silent. They were saying you could drive your car without dripping oil down the trail. That resonates with me much more than, ‘This thing is bulletproof,’” he said, referencing another of Tesla’s early talking points about the Cybertruck. “I don’t like to celebrate dystopians.”

How far being an It car goes in securing sales in the long term is anybody’s guess. But Rivian’s predecessors that earned that status in California – Tesla’s early cars and the Toyota Prius before – have fared just fine globally. “I hope the Rivian becomes a classic,” Gibson said. “It is a classic.”

Gibson clued me into something else I hadn’t considered: Rivian’s It-car status is a marker of what hasn’t changed. Namely, that the values of the people who actually live in northern California – earnest optimism, reverence for nature and a genuine desire to do the right thing, especially if that means buying something luxurious – are well intact.

UBS vs the Swiss regulation drive

Bank now finds itself confronted by the prospect of tougher rules than global competitors

This is a tale of two presidents — two presidents who are about as different from each other as you could imagine — and how their policies affect their banks. One is Donald Trump. When Trump won the US election on November 5 last year, global banks saw their share prices rise: the free-market champion would surely promote growth and demote regulation, creating a boom time for banking, particularly the big Wall Street groups. 

Within a month of taking office, Trump has duly neutered key regulators. Like other presidents before him, he has done that in part by replacing their leadership in the usual party-political post-election changing of the guard. But with the exception of the Federal Reserve, he has also deployed his signature iconoclasm: he has taken direct control of rulemaking and, in the case of the Consumer Financial Protection Bureau, he has even putatively shut down a key regulator altogether. 

The drive has had an influence beyond US shores, too, spurring deregulatory initiatives in the UK and EU amid fears that these markets risk being rendered uncompetitive. In part because of this, many European bank shares have enjoyed a boost on a par with their American rivals. Barclays and Deutsche Bank, like JPMorgan and Goldman Sachs, are up by 20-25 per cent since the US election.

There is a very different mood in Switzerland, home to another president with a crucial regulatory agenda and another giant global bank, UBS. How that agenda pans out over the coming months will have a big impact on the future of the bank.

Under the quirky Swiss system of government whereby senior ministers rotate the presidency on an annual basis, finance minister Karin Keller-Sutter is also the current Swiss president. Keller-Sutter and her colleagues at the Swiss National Bank and financial watchdog Finma are of a very different mind to the deregulating Trump, as they prepare to add a “Swiss finish” to global standards.

The push is understandable. It is less than two years since Switzerland lost one of its two global banks. Credit Suisse’s collapse, and its state-orchestrated rescue by UBS, was a huge stain on the country’s reputation for measured probity. It was also a personal trauma for Keller-Sutter, thrust into handling a high-profile systemic crisis barely two months into her finance minister role.

The result is that UBS now finds itself confronted by the prospect of tougher rules than global competitors. While the bank’s share price also bounced after Trump’s election, it suffered a precipitous drop at the start of February, when the group warned about the likely impact of the draft rules.

Some of the planned reforms are uncontentious. Finma, historically low-profile and deferential to peers in the US and UK, must become more muscular. There should be a senior managers’ regime, akin to the UK scheme introduced after the 2008 crisis, to hold senior bank executives more clearly accountable.

But it is on the issue of bank capital that horns are locked. The Swiss authorities want UBS, now far larger and far more of a too-big-to-fail risk to the country, to bolster its so-called core equity tier 1 ratio — a key measure of capital strength. The aim is to increase this ratio from its current level of about 14 per cent of risk-weighted assets (in line with many global peers) to an estimated 17-19 per cent at a cost of up to $25bn.

UBS has little room to fight back. It can let it be known that it could shift domicile (extremely complex), that it could merge with a European rival (most are less profitable or incompatible), or would be vulnerable to acquisition by a Wall Street giant (implausible given global regulators’ nervousness about large bank deals and the likelihood that the Swiss authorities would not in any case countenance losing the country’s remaining top-flight bank).

A strategy of alternative concessions might prove more persuasive. It might for example agree to a government ordinance limiting risk, by capping the scale of its investment bank at 25 per cent of risk-weighted assets. Equally, the authorities could recognise more of their own shortcomings — bankers point out that Switzerland is the only major economy not to have a public liquidity backstop for times of stress.

Expect months of wrangling ahead of a final set of reform proposals in May. Ultimately, despite the trauma Switzerland experienced through the collapse of Credit Suisse, compromise and consensus are in the country’s DNA. That, if nothing else, may give UBS and its investors cause for hope that the country will not diverge too far from the rest of the world.

House Democrats urge Securities and Exchange Commission to safeguard agency’s data

House Democrats have urged Securities and Exchange Commission acting chair Mark Uyeda to “safeguard” the agency’s data and work from the Department of Government Efficiency, or Doge.

The SEC’s vast trove of data from market participants helps ensure market integrity and prevent fraud, the lawmakers noted. “Improper access to this sensitive information could have disastrous consequences for the stable functioning of the US capital markets,” they wrote in a letter to Uyeda.

House financial services ranking member Maxine Waters and subcommittee on capital markets ranking member Brad Sherman, both Democrats from California, warned in the letter that Doge, an initiative created by President Donald Trump to slash costs and reduce the number of government employees, and its head Elon Musk, could use data from the agency to front-run investment decisions made by mutual funds, money market funds and exchange traded funds.

Through the SEC, Musk could also get access to non-public market data, such as pre-initial public offering filings, merger and acquisition information, and non-public information on Form N-Port, to then use for personal advantage, Waters and Sherman wrote.

If those associated with Doge were to use non-public trading data in the Consolidated Audit Trail in such ways, it could lead “to a loss of investor confidence, market instability and potentially significant economic repercussions — including the collapse of our financial markets and individual retirees’ nest eggs”, the Democratic lawmakers wrote.

The House members’ letter also included a list of questions including whether Doge had contacted the SEC, and, if so, whether the agency gave Doge access to any data.

The lawmakers also asked whether Doge staff had communicated with the SEC on any regulatory or enforcement matters related to Musk or Trump.

In addition, they sought information about how Uyeda planned to protect SEC employees from potential personal retaliation by Musk.

A spokesperson for the SEC said Uyeda would respond to the lawmakers directly.

Members of Doge could not be reached for comment.

Doge has posted information on its website about the SEC, including its headcount and total employee expenses, as well as its average employee’s tenure, salary and age.

The workforce data comes from the US Office of Personnel Management as of March 2024, the site notes.

SEC workforce data on divisions, offices and branches had not been immediately added to the website, though Doge.gov had mapped out the agency’s 103 offices, divisions, committees and branches.

“This is Doge’s effort to create a comprehensive, government-wide org chart. This is an enormous effort, and there are likely some errors or omissions. We will continue to strive for maximum accuracy over time,” the site said.

Running Doge as a “special government employee”, Musk, the world’s richest man, has gained access to sensitive Treasury Department payment data, closed agencies such as the Consumer Financial Protection Bureau and the United States Agency for International Development, and cut other agency budget items without congressional assent.

Democratic attorneys-general and non-government organisations have filed scores of lawsuits to stop many Trump and Doge actions.

The Government Accountability Office will investigate how Doge got access to Treasury’s payments system, Senate banking committee ranking member Elizabeth Warren and Ron Wyden, both Democrats, have stated.

“[W]e do not doubt that the approach Musk has taken at other agencies will soon come knocking at the SEC’s door,” Waters and Sherman wrote. “[T]he potential for conflicts of interest is clear.”

Musk has been probed by the division of enforcement in the past, Waters and Sherman noted.

“Mr Musk’s involvement in any decisions regarding the future of the [SEC] is highly inappropriate and raises significant questions about the agency’s continued independence and ability to enforce the law impartially and ensure our capital markets remain fair, transparent and free from manipulation,” the letter stated.

The lawmakers also questioned whether Uyeda recognised that the executive branch does not have the unilateral authority to dismantle a congressionally created agency.

“Additionally, can you confirm your commitment to preventing Doge from making any cuts to appropriated funds without Congress passing legislation to approve such cuts?” they asked.