When you read history, you tend to read about historical events, about numbers, dates, and data. But it was people who drove those events, people making decisions on the basis of uncertain information, unknown consequences and frequently in the ‚fog of war. The opening quotation in Ahamed’s book is from Benjamin Disraeli: Read no history – nothing but biography, for that is life without theory. This perfectly sets the tone for what for me is one of the best treatments of the Great Depression I’ve ever read.
This account differs from others because it is told largely fromthe vantage points of the four central bankers of the four largest economies of the day: Benjamin Strong at the New York Fed, Hjalmar Schacht of the German Reichbank, Montagu Norman of the Bank of England, and Emile Moreau of the Banque de France. Continue reading “The Lords of Finance, by Liaquat Ahamed”
It would be too harsh to put that the Indian economy is facing one of the worse situation in the last 20 years .
The FT published a Misery, Indian edition Index indicating fears over policy ‘credibility’ could send the Sensex in such a spin on Friday — India’s benchmark closed down almost 4 per cent — and trash the rupee…according to them this isn’t the classic misery index — for India substituted industrial production for unemployment data, which are lacking — but it’s the first time in over twenty years that it has remained stuck at such a high level, they note. Continue reading “The Indian economy is ‘miserable’ at the moment”
Going back to the famous Maastricht Treaty.It connected a subset of EU states through a common monetary policy (EMU) and made no treaty provision for fiscal coordination.Well It was prepared the Stability and Growth pact (http://bit.ly/199QLRy), which took its legal authority from the Treaty on the Functioning of the European Union (TFEU).
So when Last July Mario Draghi, president of the European Central Bank, spoke of the ECB’s intent to do “whatever it takes” to hold the euro area together. In the months after his comment, the ECB unveiled its Outright Monetary Transactions programme, in which it pledged to make unlimited purchases of troubled government bonds under certain conditions. No policy has been as important in bringing down government borrowing costs around the periphery. Continue reading “Eurozone Crisis & The ECB”
The Bank of England has released two papers on CCPs, which explain loss–allocation rules, and how to balance the costs of default resources with the expected losses.
Paper 19, titled: “Central counterparties and their financial resources—a numerical approach”, maintains that new regulatory standards have required central counterparties to have robust processes in place to mitigate their counterparty credit risk exposures.
“At the same time, the standards allow CCPs to tailor their risk management models. This paper considers how CCPs can optimally determine the relative mix of initial margin and default fund contributions in a stylised setting, by balancing the costs of default resources with the expected losses they protect against,” . Continue reading “Central Counterparty Clearing (CCP) some thoughts from Bank of Englnad”
At the annual general meeting of the International Swaps and Derivatives Association in Singapore concluded
yesterday,a group of panelists highlighted the lack of clarity over resolution for failed Central counterparty (CCPs) as a significant concern for the G20 objectives of eliminating systemic risk.
Central counterparty clearers stand to be the next “too-big-to-fail” institutions and could pose an acute threat to the
financial system if regulators stall on plans to manage the potential failure of a clearing entity.
There are two main processes that are carried out by CCPs: Continue reading “Derivates : The Risk is shifting to CCPs”