Category: 3. Business

Donald Trump has tried his usual tactics when it comes to getting the US Federal Reserve to lower interest rates: bully when persuasion doesn’t work, and then fire when bullying doesn’t work.

In an unprecedented assault on the central bank, the president has called the Fed chair, Jerome Powell, “stupid” and threatened to fire him for not cutting interest rates as quickly as Trump would like. Most recently, the justice department instigated a criminal investigation against Powell for testimony he gave about renovations at the Fed’s headquarters. Even so, the Fed has not budged.

Tactically, Trump’s assault on the Fed appears to be no different than his overhaul of the entire federal government. The president has learned if he pushes hard enough, he can get his way. And he has mostly been successful.

But with the Fed, it seems that Trump may have met his match. At least as far as the supreme court is concerned. On Wednesday, the court’s justices, in oral arguments, appeared resoundingly skeptical of Trump’s firing of the Fed governor Lisa Cook.

But while the justices’ skepticism could be interpreted as a sign that the court is checking executive authority, legal experts warn that any ruling against him may not be a harsh check on Trump’s power.

Instead, the court appears to be carving out a special exception for the Fed at a time when the independence of other government agencies is still under threat.

“The consequences are potentially very harmful,” said Michael Dorf, a law professor at Cornell University. “The supreme court is making war on independent agencies at the worst possible moment – which is to say at a moment when you have a president who wants to centralize power in himself and wants to appoint people who are there because of their loyalty to him and [who] have no particular expertise.”

Trump fired Cook in August, alleging that she committed mortgage fraud by listing more than one property as her primary home, a move that would give her a better mortgage rate. The accusations were first posted on social media, and a few days later, Trump removed Cook. The White House made an appeal to the highest court after a lower federal court temporarily reinstated Cook into her role.

Because Cook’s firing was haphazard, with no investigation or formal hearing about the alleged mortgage fraud, Trump’s case against Cook has opened up a host of questions the court could answer in a ruling. Were Cook’s due-process rights violated because she didn’t receive a hearing? Even if the mortgage allegations are true (Cook’s lawyers say they have evidence it was an “inadvertent mistake”), does mortgage fraud that took place before she was appointed a Fed governor constitute grounds for her removal? Should the case have been decided on by a lower court before reaching the supreme court?

Making matters even more complicated is the nature of the Fed. The US central bank was created to be a quasi-private, independent government agency that is supposed to be protected from politics. Fed officials can only be fired by the president “for cause”, though the law doesn’t specify what “cause” is.

Running in the background of the case is a big question, one that could have repercussions for the global economy: how much power will the supreme court allow a president to have over the Fed?

Typically, constitutional experts look to see how the supreme court has decided similar cases, and Cook’s firing was far from the first test of Trump’s executive powers.

Last year, Trump fired independent officials, including two Democratic-appointed members of the National Labor Relations Board (NLRB), which oversees unions, and Rebecca Slaughter, the commissioner of the Federal Trade Commission (FTC), which regulates telecommunications and media.

The supreme court allowed Trump’s firing of the officials to stand, and in Slaughter’s case, constitutional experts anticipate a landmark ruling that will strengthen executive power for decades to come.

Some within the US conservative legal movement have been advocating for the “unitary executive” theory – the idea that the president should be able to fire any executive branch officers at will. At the heart of this belief is the idea that the votes of the American people should be the only check on the president.

For conservative justices on the supreme court who support that theory, Trump’s second term has given them the perfect opportunity. Constitutional analysts say that Slaughter’s FTC firing, which is still pending, will allow the court to narrow or even overturn Humphrey’s Executor v United States, a landmark case from 1935 that limited the president’s power to fire executive officials of independent agencies.

But while conservative justices appear keen to hand the president even more power, there seems to be a single exception: the Fed.

The supreme court even mentioned the central bank when it allowed Trump’s NLRB firings to go through, a notable event given that the Fed had nothing to do with the case.

“The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” the court’s majority wrote at the time.

Many took this as a signal from the court that, should Trump try to fire an executive within the Fed, the court would resist.

Legal experts point out that, by law, the Fed’s structure within the federal government is no different than the other quasi-private, independent agencies.

“The elephant in the room in this oral argument is how come, when it comes to Lisa Cook, suddenly the judges are interested in enforcing the statute [of independence]. Whereas with Rebecca Slaughter … and all these other people he improperly removed, they just conclude the status doesn’t matter. His constitutional authority allows him to remove anybody for any reason. Like, what’s going on here?” said Lev Menand, a professor at Columbia Law School.

The justices’ rationale seems to be as much economic as legal. Amy Coney Barrett, a member of the 6-3 conservative majority on the court, brought up the fact that “we have amicus briefs from economists who tell us that if Governor Cook is [fired], that it could trigger a recession”.

“How should we think about the public interest in a case like this?” she asked.

Brett Kavanaugh, another conservative, asked Trump’s justice department direct questions about the “real-world” importance of Fed independence.

“Let’s talk about the real-world downstream effects of this, because if this were set as a precedent, it just seems to me – just thinking big picture – what goes around comes around,” Kavanaugh said. “All of the current president’s appointees would likely be removed for cause on January 20, 2029 if there’s Democratic president … so what are we doing here?”

The power of the Fed comes largely from its ability to set interest rates. High interest rates make borrowing more expensive. It can slow inflation at the risk of increasing unemployment. That Trump wants lower interest rates is not surprising: lower interest rates can give the economy a short-term boost, but at the risk of rising prices later.

It’s a balancing act that requires looking at the economic data and thinking about what’s best for the long-term stability of the economy, not the political fortunes of whoever is in power. Mess with that independence, and economic shocks such as a recession could be triggered.

With Trump’s case against Cook, “an unstoppable force has met an immovable object”, Menand said. While a majority of the justices may be fine with cutting down, for example, the FTC’s independence, “it’s a totally different game when it comes to the Federal Reserve”.

“Large business interests don’t want to see the Federal Reserve’s capacity degraded. They don’t want to see the Federal Reserve politicized,” Menand said.

To many legal scholars, the supreme court has been very lenient with Trump’s executive power, even beyond the issue of independent agencies. Over the last year, the court has allowed the administration to continue aggressive immigration enforcement tactics and has blocked lower courts from issuing nationwide injunctions that, as in his first term, could block some of his executive actions.

“One thing that concerns me a little bit is that if the court rules against Trump in the tariffs case, and in Cook, it will have gotten unearned prestige for being unbiased and standing up to Trump,” Dorf said. “You stand up to him at the most extreme edge of what he does, [but] you’re still allowing him to do all sorts of things that, in prior circumstances, we would have said the court ought to stand up to. But they’re not.”

It’s unclear when the court will release its decision on Cook’s case, though it will probably issue a ruling by June.

January 24, 2026

Coca-Cola is taking legal action against Vue after the cinema chain switched to arch-rival PepsiCo as its supplier for soft drinks in Europe.

Vue, which operates more than 90 cinemas across the UK and Ireland, put the contract up for tender last year.

In March 2025, the largest privately owned cinema operator in Europe, with 222 sites in eight countries, selected PepsiCo as its exclusive supplier until at least 2030.

The deal saw the end of a relationship between Vue and Coca-Cola that has lasted for almost 25 years.

On Thursday, Coca-Cola Europacific Partners Great Britain (CCEP) took legal action against Vue Entertainment to reclaim alleged unpaid debts outstanding when the contract was terminated.

It is understood Coca-Cola also has outstanding debts payable to Vue, which has not sought legal action relating to the amount.

Coca-Cola’s legal action has been filed by Coltman Warner Cranston, a Coventry-based law firm that specialises in debt recovery.

Darren Davoile, who leads the practice, told the Guardian that the company does not comment on client activity.

Tim Richards, the chief executive and founder of Vue, said: “One would have hoped that after 25 years, a simple phone call could have resolved a genuine dispute for such a small amount without the need for lawyers.”

Coca-Cola GB did not respond to a request for comment.

PepsiCo has a portfolio that includes Pepsi Max, Mountain Dew, Lifewtr, Bubly sparkling water and Pure Leaf.

In 2020, Vue rival Cineworld also announced a deal to move away from Coca-Cola and use PepsiCo as its exclusive soft drink supplier.

Germany is facing calls to withdraw its billions of euros’ worth of gold from US vaults, spurred on by the shift in transatlantic relations and the unpredictability of Donald Trump.

Germany holds the world’s second biggest national gold reserves after the US, of which approximately €164bn (£122bn) worth – 1,236 tonnes – is stored in New York.

Emanuel Mönch, a leading economist and former head of research at Germany’s federal bank, the Bundesbank, called for the gold to be brought home, saying it was too “risky” for it to be kept in the US under the current administration.

“Given the current geopolitical situation, it seems risky to store so much gold in the US,” he told the financial newspaper Handelsblatt. “In the interest of greater strategic independence from the US, the Bundesbank would therefore be well advised to consider repatriating the gold.”

Stefan Kornelius, the spokesperson for Friedrich Merz’s coalition government, said recently that withdrawal of the gold reserves was not currently under consideration.

But Mönch is only the latest in a string of economists and financial experts to argue that such a move would be in keeping with the greater strategic independence that Europe’s largest economy has been seeking from the US in recent months.

Michael Jäger, the head of the European Taxpayers Association (TAE) as well as the Association of German Taxpayers, has also said Berlin should make its move, arguing that the US’s stated desire to seize Greenland should concentrate minds.

“Trump is unpredictable and he does everything to generate revenue. That’s why our gold is no longer safe in the Fed’s vaults,” Jäger told the Rheinische Post. “What happens if the Greenland provocation continues? … The risk is increasing that the German Bundesbank will no longer be able to access its gold. Therefore, it should repatriate its reserves.”

Jäger said he had written last year to the Bundesbank and the finance ministry, urging them to “bring our gold home”.

Until recently the gold issue has been the preserve mainly of the far-right Alternative für Deutschland (AfD), which has repeatedly urged the return of the gold for patriotic reasons. But it has increasingly crept into the mainstream discourse.

Katharina Beck, the finance spokesperson for the opposition Greens in the Bundestag, has also spoken out in favour of relocating the gold bars, calling them an “important anchor of stability and trust”, which “must not become pawns in geopolitical disputes”.

However, Clemens Fuest, the president of the Institute for Economic Research (Ifo) and one of the country’s most prominent economists, warned against such a move, saying it could lead to unintended consequences and would “only pour oil on the fire of the current situation”, he told the Rheinische Post.

Germany’s total gold reserves are worth almost €450bn.

Just over half are held at the Bundesbank in Frankfurt am Main, 37% in the vaults of the US Federal Reserve in New York and 12% at the Bank of England in London, the global centre of gold trading. The Bundesbank says it regularly undertakes an audit of the supplies of gold it holds in storage.

Speaking last October at the International Monetary Fund’s (IMF) autumn meetings in Washington DC, the Bundesbank president, Joachim Nagel, assured attenders there was “no cause for concern” over the German gold held at the US Federal Reserve.

Frauke Heiligenstadt, the parliamentary group spokesperson on financial policy for the Social Democrats, junior partners in the government, said that while she understood concerns about the gold reserves, there was no need for panic.

“Germany’s gold reserves are well diversified,” she said. Because half of them are located in Frankfurt, “our ability to act is guaranteed”. Having gold in New York made sense, she added, because “Germany, Europe and the US are closely linked in terms of financial policy”.

But, amid Trump’s hardening rhetoric towards his western partners, an increasing number of Merz’s Christian Democrats have been speaking out in favour of relocation.

“Due to the Trump administration, the US is no longer a reliable partner,” Ulrike Neyer, a professor of economics at the University of Düsseldorf, told the Rheinische Post.

Foreign ownership in Indonesia is rarely a binary yes-or-no determination. Most sectors are open to foreign capital in principle, but access is shaped by ownership limits, scale requirements, licensing conditions, or mandatory local participation.

For foreign investors, the central question is not whether Indonesia allows foreign investment, but whether a specific business model can operate legally, sustainably, and at the intended scale within the country’s regulatory framework.

How Indonesia determines foreign access

Indonesia regulates foreign participation at the level of business activities, not at the level of the investor or the company’s name. Whether a foreign investor may own a company outright, hold a minority position, or must partner with a local entity depends on how the proposed activities are defined and how those activities are treated under national investment policy.

Ownership rules are set centrally but applied through a licensing framework influenced by sector ministries. As a result, access outcomes are structured rather than arbitrary, but they are also not automatic. Participation reflects policy priorities, sector sensitivity, and economic impact rather than purely commercial intent.

Reading the Positive Investment List in practical terms

The Positive Investment List functions as a policy filter rather than a definitive permission table.

It categorizes activities as open, conditionally open, capped, or reserved based on national priorities.

In practice, the list provides orientation rather than certainty. While it establishes broad eligibility, it does not operate independently from licensing interpretation or sector regulation. Actual access depends on how activities are applied within the licensing system and whether accompanying conditions are met. A sector may appear open on paper while remaining constrained in execution due to ownership caps, investment scale requirements, or sector-specific licensing conditions.

How foreign participation is structurally restricted

Foreign participation is shaped through overlapping regulatory mechanisms rather than a single rule. In some activities, foreign ownership is capped at defined levels such as 49 percent or 67 percent, requiring Indonesian participation regardless of investment scale. These caps affect not only equity participation but also control, governance, and the ability to make unilateral decisions.

In other activities, access is conditioned primarily on scale rather than ownership percentage. Indonesia applies investment plan value thresholds to determine whether certain activities are open to foreign investors. In many sectors, foreign participation is permitted only where the planned total investment value meets or exceeds IDR 10 billion (US$590,000). This threshold is assessed at the project level and is distinct from paid-up capital requirements. As a result, an investment can be legally incorporable but practically inaccessible if its planned scale does not meet policy expectations.

These mechanisms operate together. Compliance with an ownership cap does not negate scale requirements, and meeting an investment threshold does not override sector-specific licensing conditions. Feasibility must therefore be assessed holistically rather than rule by rule.

Why business activity definition determines outcomes

The way a business defines its activities is a structural decision with long-term consequences. Similar commercial models can face materially different ownership outcomes depending on how activities are classified within Indonesia’s regulatory framework.

Two investors pursuing the same revenue model may receive different ownership treatment if one defines its activities narrowly while the other adopts a broader or differently framed scope. These differences may not prevent incorporation, but they often surface later when additional licenses are required, when activities expand beyond the original scope, or when records are reviewed during audits or regulatory checks.

Activity definition determines not only initial access but also the durability of that access over time.

Capital structure and practical market access

Capital requirements operate on two distinct levels. At incorporation, foreign-owned companies are required to issue and pay up a minimum of IDR 2.5 billion in capital (US$145,000) under statutory company law requirements. This threshold enables legal establishment, but it does not determine whether an activity is accessible in practice.

Separately, many sectors assess feasibility based on investment plan value rather than equity contributions. Where foreign participation is conditioned on a minimum planned investment of IDR 10 billion (US$590,000), capital may be deployed progressively rather than paid up in full at entry. However, the approved investment plan anchors regulatory expectations. Significant deviations between approved plans and actual deployment can trigger licensing issues or additional scrutiny, affecting both cost and flexibility.

Capital planning shapes not only entry feasibility but also execution risk and long-term regulatory stability.

When local partnerships become mandatory

Local partnerships arise when ownership caps restrict foreign participation beyond defined thresholds. In these cases, joint ventures are regulatory outcomes rather than strategic preferences.

Mandatory partnerships affect feasibility in several ways. Capped ownership limits influence control over decision-making, pace of execution, and governance structure. They also complicate exit options, as transfers of shares are constrained by ownership rules and regulatory approvals. For investors, the key question is whether the required partnership structure aligns with commercial objectives and long-term risk tolerance, not merely whether a local partner can be identified.

Areas of interpretation and regulatory exposure

Not all sector access rules are explicit or uniformly applied. Regulatory interpretation, precedent, and administrative practice influence outcomes, particularly in activities involving hybrid business models or evolving sectors.

Interpretive exposure is often not visible at entry. It tends to emerge as the business scales adds activities, seeks financing, undergoes restructuring, or prepares for M&A or exit transactions. Where ownership caps or investment thresholds apply, alignment between activity definition, investment classification, and licensing commonly extends approval timelines from several weeks to several months, increasing both cost and execution risk.

Long-term strategic implications

Foreign ownership conditions extend beyond initial market entry. They shape scalability, restructuring risk, acquisition options, exit flexibility, and valuation.

Once ownership structures, activity definitions, and investment classifications are embedded in licensing approvals, later changes are assessed against the original configuration. 

Assumptions that create structural risk

Foreign investors often assume that ownership limits can be bypassed through structuring shortcuts, adjusted easily after incorporation, or offset through flexible capital declarations. In practice, ownership and investment rules are enforced structurally rather than informally.

These assumptions rarely fail at entry. They tend to fail when transaction size increases, when external financing is introduced, or when exit and M&A activity is contemplated, at which point earlier design decisions are reassessed under heightened scrutiny.

Ownership assessment as a feasibility decision

Foreign ownership analysis belongs at the feasibility stage, before incorporation and capital commitment. Ownership rules and investment thresholds determine whether an investment is structurally viable and whether Indonesia is the right market for a given business model, not merely how to enter it.

Bottles of children’s play sand have been withdrawn from shelves by the craft retailer Hobbycraft after a parent discovered they were contaminated with asbestos.

The parent, who did not wish to be named, raised the alarm after her children played with the sand at a party.

She sent samples off to a testing lab, which found traces of asbestos fibres in the bottles of yellow, green and pink sand sold in Hobbycraft’s Giant Box of Craft arts kit.

Asbestos can cause cancer in later life if inhaled, although the risk to children who played with the sand is thought to be low.

The discovery came two months after asbestos traces found in similar play sand products in Australia prompted a government recall and the closure of schools and nurseries across the country and in New Zealand.

All the affected products are manufactured in China, where items containing less than 5% of asbestos can be labelled asbestos-free. UK law says that there is no safe limit for exposure to the mineral.

The parent said: “The bottles of coloured sand looked extremely similar to ones I had seen on a news report of play sand recalled in Australia.

“I was concerned enough to buy a set at Hobbycraft and send it to an accredited lab for testing. Three of the five colours came back positive for fibrous tremolite asbestos.”

She alerted Hobbycraft, which withdrew the product from sale but declined to issue a recall notice. “I am getting increasingly upset thinking that kids are being exposed unnecessarily,” she said.

Hobbycraft said that no UK authority had warned of a risk and that there was no evidence of harm to customers.

However, a spokesperson said: “As a precaution, we have voluntarily removed the product from sale while we carry out independent testing … We will update customers as soon as we are in a position to do so.”

A government source criticised Hobbycraft’s response. “Parents are right to be concerned by this,” the source said. “Officials are investigating, but there’s no good reason why Hobbycraft shouldn’t recall this themselves, given the evidence.”

The issue highlights post-Brexit gaps in health and safety law, which leave authorities unable to issue recalls without hard evidence of harm to health.

The so-called “precautionary principle”, abolished when product safety legislation was redrafted after Brexit, allowed the government to restrict products thought to pose a serious threat to health, without having to acquire scientific evidence.

Campaigners, including the British Occupational Hygiene Society, have criticised the government for refusing to reinstate powers to withdraw potentially hazardous goods when product safety laws were redrafted last year. Current rules rely on exporting countries to alert authorities to problem products.

“We know that there is no way that every product landing on British doorsteps can be tested individually for safety and the labels can’t be made to tell the truth, so, it was a missed opportunity for the government,” said Prof Kevin Bampton, CEO of the British Occupational Hygiene Society.

“We do have the precautionary principle for the environment, which means that bats and newts in some ways have better protection than people working in Britain and, potentially, our children.”

The Department for Business and Trade rejected the claims.

“We have some of the most robust product safety laws in the world and any product being put on the UK market by businesses must meet our strict criteria,” said a spokesperson.

According to the British Occupational Hygiene Society, the health risk to children who played with the contaminated sand is likely to be low, as there were only small quantities in the bottles.

However, Bampton warned that the long-term risks of exposure to asbestos remain little understood. He said: “This issue should be a wake-up call for regulatory change, so governments can be proactive, act fast and protect human health from risks before they protect profit.”

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If anyone should know the importance of being a stickler for detail, it is insurance executives. But Zurich’s £8bn takeover bid for FTSE 100 specialist Beazley has produced some slippery arguments from both sides.

At the start of the week, Zurich’s approach looked like a classic “bear hug” — a public bid lobbed in at a high premium to push a recalcitrant target to the table. Chief executive Mario Greco said his prior, private approaches to Beazley had been rebuffed, so it was time to “have shareholders say what they think”. A mooted price of £12.80 per share — 56 per cent above Beazley’s undisturbed share price — looked generous; Beazley’s shares jumped and several analysts said the offer looked compelling.

Or maybe not so generous? On Thursday, Beazley said Zurich had offered a higher price of £13.15 last summer, and that the UK company had engaged “appropriately” at the time. The implication was that Greco is opportunistically taking advantage of Beazley’s 17 per cent share price fall since then.

Beazley may be pushing its luck. For all its emphasis on strong growth prospects and recent milestones, it’s not for nothing that its shares have slumped. The speciality insurance sector — particularly in cyber attacks, where Beazley is a leader — is entering what is expected to be a prolonged rough patch of falling prices, which will weigh on growth.

British boards have long been criticised for meekly rolling over when confronted with a half-decent bid, so Beazley can be commended for fighting its corner. There is a fine line between determination and truculence, but there are signs the companies may not actually be as far apart as their comments suggest.

For one thing, even Beazley chief Adrian Cox has acknowledged the industrial logic for a combination. Zurich would boost its market share in speciality insurance and get a foothold in the Lloyd’s of London marketplace, while Beazley could reach far more customers as part of a global giant.

Some analysts think Zurich can pay even more. Jefferies thinks it could afford to lift the current bid by as much as 10 per cent; Autonomous estimated it could go even higher. Beazley, meanwhile, has already tweaked its language to say Zurich’s most recent proposal is only a “material” undervaluation rather than a “significant” one; it might not take a huge increase from here to win over the board.

This is all, of course, the usual cut and thrust of M&A. But it’s curious to see emotions run high in an industry that specialises in applying a cold analytical approach to stressful events. They should be able to find a number that adds up for everybody.

nicholas.megaw@ft.com

KARACHI:

The State Bank of Pakistan (SBP) has warned that cyber risk has emerged as a systemic threat to financial stability, public confidence and economic growth, as the central bank prepares to issue a comprehensive Cyber Resilience Strategy for the banking sector.

In an official statement issued on Friday, SBP Governor Jameel Ahmad said Pakistan’s first-ever industry-wide cybersecurity drills for banks were designed to test not only technical response capabilities but also senior management decision-making during simulated cyber crisis scenarios. The drills simulated coordinated cyber-attacks across one or multiple institutions that, if not managed effectively, could pose risks to the stability of the financial system.

The governor said the exercise reinforced the need for preparedness, accountability and leadership, stressing that cyber resilience should be measured by how effectively institutions respond to attacks rather than whether incidents occur. He noted that participating banks demonstrated commitment beyond regulatory compliance by investing in crisis readiness and coordination.

Highlighting the evolving threat landscape, Ahmad said growing interconnectedness, rapid technology adoption and rising geopolitical tensions had increased cyber risks. He added that threat actors were now highly skilled, organised and well-resourced, while the domestic shortage of trained cybersecurity professionals constrained the sector’s defensive capacity.

He emphasised that cyber resilience could not be achieved in isolation and required collective preparedness, transparent information sharing and trust between regulators and regulated entities. Maintaining public trust, he said, was essential as the banking sector continued its digital transformation.

Outlining recent measures, the governor said SBP had established a dedicated Cyber Risk Management Department to strengthen supervision, deepen engagement with banks and improve incident reporting frameworks.

The governor announced that SBP would soon issue a Cyber Resilience Strategy, titled “Cyber Shield 2025–30”, built on five pillars, with lessons from the drills embedded into future operations across the banking sector nationwide overall.