Archive for October 24th, 2018

On 24 October 1648, the Treaty of Westphalia was signed…

October 24, 2018

Today marks the 270th anniversary of the Treaty of Westphalia which shaped much of Europe as we know today.

A nice short piece on the anniv:

The Westphalia area of north-western Germany gave its name to the treaty that ended the Thirty Years’ War, one of the most destructive conflicts in the history of Europe.

The war or series of connected wars began in 1618, when the Austrian Habsburgs tried to impose Roman Catholicism on their Protestant subjects in Bohemia. It pitted Protestant against Catholic, the Holy Roman Empire against France, the German princes and princelings against the emperor and each other, and France against the Habsburgs of Spain. The Swedes, the Danes, the Poles, the Russians, the Dutch and the Swiss were all dragged in or dived in. Commercial interests and rivalries played a part, as did religion and power politics.


The war was largely fought on German soil and reduced the country to desolation as hordes of mercenaries, left unpaid by their masters, lived off the land. Rapine, pillage and famine stalked the countryside as armies marched about, plundering towns, villages and farms as they went. ‘We live like animals, eating bark and grass,’ says a pitiful entry in a family Bible from a Swabian village. ‘No one could have imagined that anything like this would happen to us. Many people say that there is no God…’ Wenceslas Hollar recorded devastation in the war zone in engravings of the 1630s and starvation reached such a point in the Rhineland that there were cases of cannibalism. The horror became a way of life and when the war finally ended, the mercenaries and their womenfolk complained that their livelihood was gone.

The peace conference to end the war opened in Münster and Osnabrück in December 1644. It involved no fewer than 194 states, from the biggest to the smallest, represented by 179 plenipotentiaries. There were thousands of ancillary diplomats and support staff, who had to be given housing, fed and watered, and they did themselves well for close to four years, despite famine in the country around. Presiding over the conference were the Papal Nuncio, Fabio Chigi (the future Pope Alexander VII), and the Venetian ambassador.

The first six months were spent arguing about who was to sit where and who was to go into a room ahead of whom. The principal French and Spanish envoys never managed to meet at all because the correct protocol could not be agreed. A special postal system handled reams of letters between the envoys and their principals at a time when it took ten days or more to send a communication from Münster to Paris or Vienna and twenty days or more to Stockholm or Madrid. Slowly deals were hammered out. Even then it took almost three weeks just to organise the signing ceremony, which commenced at two o’clock in the afternoon of Saturday, 24 October 24th 1648.

The treaty gave the Swiss independence of Austria and the Netherlands independence of Spain. The German principalities secured their autonomy. Sweden gained territory and a payment in cash, Brandenburg and Bavaria made gains too, and France acquired most of Alsace-Lorraine. The prospect of a Roman Catholic reconquest of Europe vanished forever. Protestantism was in the world to stay.

I liked this bit of trivia: Sweden gained territory and payment in cash 🙂


Ethics in banking – from Gordon Gekko to George Bailey (It’s a wonderful life)

October 24, 2018

I had written a recent piece on how culture and ethics has become one of the central topics of discussion in central banking.

Danièle Nouy, Chair of the Supervisory Board of the ECB in this speech looks at two characters from the two Hollywood movies. One is Gordon Gekko of Wall Street who epitomized greed and was fine with any conduct in finance as long as it brought more returns/income. Another is George Bailey of It’s a Wonderful Life who used his own money to pay depositors and save his bank.


European Central Bank’s List of supervised entities in different Euroarea countries

October 24, 2018

This is an interesting list put up by ECB of the entities it has supervised lately. It is country-wise. It has even given reasons for their supervision which varies from large size to Significant cross-border assets. There are 118 such entities. What is interesting is that within the 118, there are several subsidiaries as well.

It also has a huge list of other financial entities which are not significant “as of now”….


True finance and three lies of finance..

October 24, 2018

Interesting lecture by Mark Carney of Bank of England.

He talks about how the GFC has led to changes in the financial system for the good. But there can be no progress if we don;t know the three lies of finance:

  • Lie I: “This Time Is Different”
  • Lie II: “Markets Always Clear”
  • Lie III: “Markets Are Moral”


He says we should work towards true finance. Call it truer finance actually:


Will Indian financial markets click Robert Merton’s SeLFIES?

October 24, 2018

Prof. Robert Merton recently gave the RH Patil memorial lecture organised by NSE.

Here is my recent piece where I have reviewed the key ideas of his lecture. The lecture was about this retirement financial product which he has named as SeLFIES. I also have tried to figure whether and how India can click these SeLFIES.

%d bloggers like this: