- Who’s afraid of a big current account deficit?
- What is the CAD?
- What if there was no capital account?
- Should we bemoan the large Indian CAD?
- A big CAD got us into trouble in 1991. Won’t that happen again?
- Why won’t all channels choke all at once?
- What kinds of foreign investors respond the most to rupee depreciation?
- Why is a large CAD seen as a big problem?
- What is the role of MOF or RBI in ensuring adequate capital comes into the country to match the CAD? Continue reading “The Current Account Deficit of India (CAD)”
- Lesson #1 Government agencies allocate capital better than the private sector
- Lesson #2 Central banks should control asset prices and prevent them from falling
- Lesson #3 Darwin & Schumpeter were wrong, creationists are right; there is such a thing as a free lunch
- Lesson #4 Towards a new orthopraxy
- Lesson #5 Wondrous tools used by the clergy to grow GDP
- Lesson #6 How to finance infinite needs
Lee C. Buchheit published a paper on walking back from Cyprus, found interesting to share some his thoughts:
They have 4 options on last Friday March 15th 2013:
(i) Give Cyprus a complete bailout (estimated to cost €18 billion).
(ii) Restructure the outstanding Cypriot bonds, €4.4 billion of which are governed by Cypriot law and €3.8 billion by English law.
(iii) Haircut excess deposits in the Cypriot banking system; that is, deposits in excess of the €100,000 minimum covered by the local deposit insurance scheme. These represent about half of the total deposit base. Continue reading “CYPRUS – Bailout and Alternatives”
State Bank of India chairman Pratip Chaudhuri, yet again, took on the Reserve Bank of India (RBI), saying saying CRR is a “waste” for the economy and successive interest rate cuts by central bank have failed to contain inflation.
The CEO caused a flutter in the banking community by demanding the abolition of the Cash Reserve Ratio (CRR) in SBI vs RBI round II. RBI did promptly appointed a committee to look at this issue. The reserve ratios, CRR and SLR (Statutory Liquidity Reserve), are an important feature of Indian banking regulation. Continue reading “CRR VS SLR : ROUND II RBI VS SBI”
Economy always passes in different phases could be classified as the boom phase, the downside or the burst phase . Central bankers are the key players in the economy with limited power in their hand.
Alans Greenspan ( former Chairman of the Federal Reserve) and YV Reddy ( Former Chairman of RBI) were credited with far greater power then they ever had and with responsibility for outcomes largely beyond their control. Central bankers actually have very limited tools and hence limited powers.
Reddy in India understood Continue reading “THE TWO CENTRAL BANKERS – Shared in many B schools”