Resolutions and old habits

New years bring fresh beginnings for some and the return to bad old habits for others. Jerry Levin, the former chief executive of Time Warner, who apologised a decade after selling the US media company to AOL in “the worst deal of the century”, epitomises the former. Private-sector bank chiefs, who have been summoned to Basel this weekend because the Bank for International Settlements is worried they have resumed their excessive risk-taking, belong to the latter. Some nations also made resolutions. Iceland’s parliament tried to get 2010 off to a better start by drawing a line under the €3.9bn debt it owes to the UK and the Netherlands, but its president put the plan to a referendum that could overturn it, so turning the remote island nation into a pariah. Given the dire state of UK finances ahead of upcoming elections, politicians are eager to get their hands on any funds they can to reduce the £180bn budget deficit. They are right to be worried. The economist who wrote the book on the impact of the financial crisis on public finances, Kenneth Rogoff, has warned governments they are entering the danger zone if gross public debt exceeds 90 per cent of gross domestic product. This gives the UK two years to put its house in order, but the US may only have one. Japan might also struggle after losing its lone fiscal disciplinarian as it finds itself in the worst budgetary position since World War II. The corporate world got off to a slower start, but Nestle was faster than most. It bought Kraft’s pizza division for $3.7bn in an apparent quid pro quo for withdrawing from the race to acquire Cadbury. It also sold a further 52 per cent stake in US eyecare company Alcon to Novartis for $28bn. John Casey, Lex publisher http://www.ft.com/lex/bes BACK to http://margotbworldnews.comt