A Bibliography of Books on Finance: An idiosyncratic account of an autodidact’s financial education Andrew Cornford

This is a list of the books on financial risk management and regulation as well as related aspects of finance used by me for learning – since I first began to write commentary on the subjects for UNCTAD and then for organisations such as the Group of 24 and NGOs including the Observatoire. This list was requested by someone who felt that economists nowadays make relatively little use of books, preferring journal articles and materials extracted from the internet. My own preference for books stems principally from two sources: my temperament which prefers fleshed out exposition; and the requirement of…

When Business Turns ‘Easy’ C.P. Chandrasekhar

Its once again a time for exposés of big ticket scams. The headline hogger currently is the alleged huge Rs. 11,400 crore ‘scam’ unearthed in transactions through the Punjab National Bank (PNB) involving diamond merchants Nirav Modi and Mehul Choksi. That this is not an isolated occurrence is established by news of another Rs. 3,700 crore alleged fraud involving Vikram Kothari of Rotomac Pens being reported almost simultaneously. The full details of the possible fraud in either of these cases is yet to emerge. But underlying them is the suspicion that loans or guarantees of huge magnitudes were offered to…

Can Banking Recover? Jayati Ghosh

The bank frauds involving Punjab National Bank (PNB) and the companies associated with businessmen Nirav Modi and Mehul Choksi as well as the Rotomac case couldn’t have come at a worse time. The Indian banking system is already reeling under the pressure of growing NPAs, or non-performing assets (less politely known as loans that are not going to be repaid), which will touch nearly ₹10 lakh crore by March this year. This does not include the ₹6 lakh crore already written-off. This has already caused a slowdown in disbursal of bank credit, in turn affecting productive investment. Failure at many…

The other face of Private Banking C.P. Chandrasekhar and Jayati Ghosh

Private banks, especially foreign ones have relied on off-balance sheet liabilities to earn revenues and profits, courting risk and leaving the business of banking proper largely to the public sector banks. Other_Face_Private_Banking  (Download the full text in PDF format) (This article was originally published in the Business Line on January 15, 2018)      

The Demise of Bank Credit C.P. Chandrasekhar and Jayati Ghosh

Growing economies generally show increasing deployment of bank credit – but in India this has been decreasing for years and recently has been almost flat. What does this suggest about the growth process and the health of the Indian economy. Bank_Credit  (Download the full text in PDF format) (This article was originally posted in the Business Line on 1 January 2018.)

Create a Crisis and make it Worse C. P. Chandrasekhar

On August 10, the government tabled a new bill in Parliament, with the aim of using its majority to push through a desperate policy initiative in the form of the Financial Resolution and Deposit Insurance (FRDI) Act. The Act seeks to create an ostensibly ‘independent’ FRDI Corporation, which would take over the task of resolution of failing financial firms from the Reserve Bank of India and other regulators. To that end, it is to be armed with special and near draconian powers to implement its mandate, and given control of the deposit insurance framework currently managed by the Deposit Insurance…

NPAs: All talk and no action C. P. Chandrasekhar

The media are full of it. Viral Acharya, a recently inducted Deputy Governor of the Reserve Bank of India (RBI), has declared publicly that resolving the problem of bank stress resulting from large non-performing assets (NPAs) on their balance sheets is the RBI’s priority, taking precedence over measures such as interest rate reduction to spur growth. The issue here is not just one of preventing bank insolvency, but of keeping the credit pipe open. Banks burdened with NPAs are likely to be less willing to expand their loan books, and if interest rates are too low, banks may be unwilling…

Redistributing Regulatory Power C.P. Chandrasekhar

In March this year, two years after its constitution, the Financial Sector Legislative Reforms Commission (FSLRC, chaired by Justice B. N. Srikrishna) submitted its two-volume report. While the Commission’s title seems limited in terms of remit, its report is indeed far-reaching. Exploiting the rather wide and ambiguous terms of reference set for it, the Commission has chosen not to restrict itself to merely recommending amendments to existing legislation and the enactment of marginal new laws to modify the historically evolved legal framework. Such an exercise is indeed necessary to excise redundancies, address conflicting mandates, close gaps and accommodate new features…

Reflections on the Production, Management and Measurement of (Primarily Financial) Risk Andrew Cornford

In this article, the author discusses the evolution of prediction and of the control and measurement of risk with the aim of providing a historical perspective on regulation and risk management for today's financial sector. The paper includes concluding observations on the way in which changes in risk management have had effects on financial firms and those who work for them with implications for ethical dimensions of their performance. reflections (Download the full text in PDF format)

New Zealand gets its own ” People’s Bank “

Kiwibank, a new bank for people wanting to go back to a simpler way of banking in New Zealand, began a nationwide rollout on March 23. The country's only public bank, it is also the only New Zealand-owned bank since 1989 when the last of the four government-owned banks, the PostBank, was privatised. Few countries sold and deregulated public utilities and services faster than New Zealand under successive Conservative governments in the 1980s and 1990s. Now under a Labour-Alliance coalition government, the public sector is making a come back in banking, electricity, telecommunications and transport. Kiwibank is the brainchild of…