Archive for December 13th, 2010

Ask Dominique Strauss Kahn (IMF chief)

December 13, 2010

Allison Leader of Thomson Reuters email about an upcoming interview they are having with IMF chief Dominique Strauss Kahn.

We’ve set up a blog, twitter feed, flickr feed and YouTube channel so people can discuss the latest developments in the financial crisis in the run up to the event. We would be very interested to receive ideas, questions and comments you may have on the topic. We’ll also have some embed code available if you wanted to have readers watch the interview live from your blog.

They have set up a blog here – http://blogs.reuters.com/trnewsmaker/ where some Qs have already been posted for DSK. Other feeds are here:

  • twitter.com/trnewsmaker
  • youtube.com/user/reutersvideo
  • flickr.com/groups/trnewsmaker

So, feel free to log in and ask questions. I will post about watching the interview live as soon as I get the code.

Indian banks during 2007-09 crisis: public sector vs private sector banks

December 13, 2010

I came across this paper by Viral Acharya et al presented at the 7th NIPFP-DEA research program. This is a paper whose theme I have been wanting to read for a long time.

Indian financial system largely escaped this crisis barring the 3-month liquidity crunch post Lehman. However, even in that time certain banks and financial system fared worse than others. There was a shift of household savings to bank fixed deposits and within banks to government banks. What does research show?

Acharya et al show this interesting relationship. They calculate risk of individual banks before the crisis. They then club these banks as private and public sector banks. Next they see banks’ share prices in the time of the crisis. Their findings are:

  1. In private sector , the banks which were seen as more risky before the crisis, their share prices fell more in the time of the crisis. Even deposits contracted more for riskier banks.  hence, risk works both ways.
  2. In public sector, the trend is reversed. Public sector banks despite having higher risk contribution, do not fall as much. Deposit growth too remains strong.

Very contrarian findings. We associate PSBs with lower risks hence the stability. But the authors have a different story to tell.

The paper uses a measure called Marginal Expected Shortfall (MES):

(more…)

Profile of Avinash Dixit

December 13, 2010

Jeremy Clift of IMF (editor in Chief of this superb IMF publication – Finance & Development) sends me an email alerting me to this exciting profile of Prof. Avinash Dixit in Dec-2010 edition.

How he became an economist? Via a series of accidents:

(more…)

Fed to webcast its open meeting

December 13, 2010

Federal Reserve tries to become more transparent. It would now webcast its meeting:

The Federal Reserve Board announced on Friday that a live webcast of its December 16 open meeting will be available on the Board’s website. At the meeting, which is scheduled to begin at 2:30 p.m. EST, the Board will discuss proposed rules governing debit card interchange fees and routing. This will be the first time the Board has webcast one of its meetings. The Board has previously webcast other public events such as Chairman Bernanke’s town hall meeting with educators Leaving the Board and a conference on addressing issues facing small businesses Leaving the Board.

For a review of transparency in central bank communication see my recent research.


Follow

Get every new post delivered to your Inbox.

Join 1,184 other followers