Archive for August 16th, 2019

Central Bank of Iceland vs Iceland’s largest fishing exporter: Case of lost reputation

August 16, 2019

Central banks are embroiled in all kinds of things.

Iceland government imposed capital controls in 2008 crisis with central bank incharge of their enforcement.

Jon Danielsson of London School of Economics in this article points how things went wrong for the central bank:

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Network Analysis of NEFT Transactions in India

August 16, 2019

Shashi Kant and Sarat Chandra Dhal of RBI in Aug-2019 Bulletin article do network analysis of NEFT transactions in India:

Since the global crisis in 2008, network models have emerged as a tool for analysis of interbank financial exposures. The recent literature has accordingly emphasised the role of network analysis of interbank payment transactions in complementing the existing framework for financial stability analysis (Caccioli et al., 2018). Where central banks are the operators of payment and settlement infrastructure, as in India, a comparative advantage is that it is relatively easier to acquire clean, structured and accurate data that are crucial for network analysis.

Surprisingly, therefore, there has been little research on the interconnectedness of participating entities in the payment system in India. The motivation for
this study is to bridge this gap as a first attempt in the Indian context. We use the National Electronic Fund Transfer (NEFT) system as a case study. Operated by the Reserve Bank of India (RBI), it is India’s largest payment system by volume and a game changer in the retail payments sphere.

We examine the network topology of the NEFT system and analyse financial interconnectedness using network metrics of centrality. Using bilateral transaction information for each participating institution aggregated for March and April months of 2019, we build a network graph depicting the linkages. We use these data to explore the connections between various groups of banks in order to identify patterns. We also seek prominent players in the payment network in order of their systemic importance using a non-parametric methodology (Jaramillio et al., 2014). 

In summary, our findings show that out of the public sector, private sector and foreign banks that constitute around 83 per cent and 87 per cent of the
total transactions by value on NEFT in the month of March and April respectively, the flow from private sector to public sector banks is very large, with public
sector banks being net receivers in the system. We also present evidence of strong connections between public and public sector, and between private sector
banks, nascent role of co-operative banks and newly established payment banks in NEFT. 

Lots of amazing pictures of networks..

Project to create digital history of tea plantations in Nilgiris

August 16, 2019

Fascinating initiative by the British Library and the Government of France:

Tea plantations in the Nilgiris and Coimbatore districts now have the opportunity to get their historic documents preserved for posterity free of cost, thanks to a special project supported by the British Library and the Government of France.

“The project aims to create digital documentary resources in the Nilgiris and Coimbatore districts covering the period from 1850 to 1970,” coordinator of the project K Rameshkumar, who is Head of Photo Archives of French Institute of Pondicherry (IFP), told Business Line.

The IFP is under the French Ministry of Foreign Affairs.

“This project coming under Endangered Archives Programme is supported by the British Library Arcadia,” he said. “We will help planters possessing old documents preserve them forever through high quality digitalisation and save them permanently from loss.”

“Our intention is to work on the site of the plantations itself. We will not take any documents with us; instead, we will return the original documents along with a digital copy of high resolution images to the owners.

The digital copies will be preserved at the British Library archives as well,” Rameshkumar noted.

“The historic documents can be of any type – land and property records, photographs, old maps, route sketches, pencil or other drawings, printed materials, books or manuscripts,” the project’s Research Assistant Noel Francis said. “We can document the lifestyle of planters of yesteryears in terms of their working conditions, bungalows, medical facilities, schools, churches, labour quarters, workers’ wages and other registers, planters’ clubs, dresses horse rides and transportation,” he said. “Collectively, we aim to create a digital version for the history of the Nilgiris and Coimbatore districts which will be a treasure for posterity.

Those interested can contact us through e-mail: rameshkumar@ifpindia.org or over phone (0) 9363156400.”

The Nilgiri Planters’ Association is 128 years old.

“Besides, the small scale tea sector is in the possession of Badaga, the predominant community of the Nilgiris, whose ancestral family property holding records as also photographs and handwritten documents should be nearly a century old.

We have come across some of them during our initial survey,” said Rameshkumar, who had digitised some other aspects of the historic lifestyle in The Nilgiris in his earlier projects.

 

Who regulates public sector banks: Government or RBI?

August 16, 2019

The dual control over public sector banks is one of the biggest problems facing Indian banking.

In this moneycontrol article, I ponder over the recent Finance Bill where government framed regulations over appointment of Directors and recent RBI’s definition ‘fit and proper’ status of these directors.

Monetary transmission in Australia: Fairly efficient even at lower interest rates

August 16, 2019

Australian central bank has cut policy rates in June and July meetings by 25 bps. The policy rate is at 1% currently.

In this speech, Christopher Kent, Assistant Governor (Financial Markets) speaks about how interest rates are being lowered everywhere including Australia. The transmission in Aus has been quite efficient with most %age of rate cuts passed on to people:

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