Archive for September 9th, 2019

Former Central Bank of Ukraine Governor struck by a car: accident or threat?

September 9, 2019

Central Bank of Ukraine (called National Bank) and its officials have been under pressure both from government and private sector. The central bank forced nationalisation of PrivatBank, a private bank owned by an oligarch. The oligarch threatened the nationalisation in court which went in his favour. The Governor who forced nationalisation was Valeria Gontareva and she was given death threats etc back then as well.

However, it seems problems continue.

The former Governor is currently a Prof at LSE was recently struck by a car in London. Her friends smell something fishy about it:

Valeria Gontareva, the former head of the National Bank of Ukraine (NBU), says she has been hospitalized in London since Monday, Aug. 26 after she was struck by a car in the city center of the U.K. capital.

Gontareva told the Kyiv Post on Aug. 30 that “her friends” do not believe the incident was an accident and that the police are looking into the possibility of foul play.

“The police are doing an investigation now,” she said. “It happened in the center of London… on a pedestrian crosswalk, so a lot of witnesses and CCTV records there. Hope we will have an answer one day,” the senior economist added.

The former NBU chief has previously spoken out against threats she has allegedly received from people allegedly close to the Ukrainian oligarch Ihor Kolomoisky. Gontareva has also told the Kyiv Post that she fears for her safety, even in London.

Gontareva was in charge of the NBU in 2016 when the country’s largest bank, PrivatBank, was nationalized and taken away from its then owners, Ihor Kolomoisky and Gennadiy Boholyubov.

Investigators discovered the bank had a $5.5-billion hole in its ledger and faced collapse after years of alleged insider lending and fraud. Multiple court cases, including in the U.K. and U.S., are currently ongoing in which PrivatBank is attempting to recover assets that it alleges were looted from the bank.

Gontareva, who was NBU governor until she resigned in May 2017 and is now an academic at the London School of Economics and Political Science (LSE), recently told the Kyiv Post that the PrivatBank case is a litmus test for Ukrainian reforms and justice.

The economist also said that NBU independence must be “fiercely protected” while civil society and lawmakers should look for warning signs that its impartiality is under attack.

Gontareva says that she has fractured bones in her foot after being knocked down by the car. She has already undergone one operation and is awaiting another.

This is scary and hope the fears are unfounded. But who knows it could be the next low for central bankers where they are threatened elsewhere too. As I had asked: Who wants to be a central banker?

Advertisements

RBI’s report on developing secondary market for loans

September 9, 2019

RBI recently released a report on the need to develop a secondary market for corporate loans.

In this moneycontrol article, I review the main findings of the report.

Who let the economist out?

September 9, 2019

This is an ouch piece by Jinoy Jose P in Business Line.  It reviews the recent book by Binyamin Appelbaum, of The New York Times: The Economists’ Hour: How the False Prophets of Free Markets Fractured Our Society.

Why did God create economists? “To make weather forecasters look great.” Jokes apart, the jury is still out on whether economists have made any significant and meaningful contribution towards greater common good, especially whether they have really been able to foresee or forestall economic crises. As they say, most of the tom-tommed economists have been so ‘successful’ at predicting financial crises that they have forecast 11 of the past eight financial crises in the past 40 years.

What’s funnier is that despite all the mighty mishaps that wrecked economies, businesses and, most importantly, lives of billions of common people across the world, economists command immense clout in policy-making worldwide and many of their ‘chic’ and controversial decisions continue to wreak socio-economic havoc.

This is not to say all economists are fake and all of economics is hokum. From Adam Smith, Karl Marx and John Maynard Keynes to Amartya Sen and Thomas Piketty, there have been an eclectic mix of economists whose ideas have changed the world in unimaginable ways,helping lift millions out of poverty. But not many of them won awards or went on to chair panels that created policies. In fact, a lot of them are still underrated and most of the overrated and popular economists are, sadly, doing counterproductive work that create economic disparity and inequality in society.

Popular among them are the champions of the free market. As Binyamin Appelbaum, an editorial board member of The New York Times, writes in his well-timed and well-researched new book, The Economists’ Hour: How the False Prophets of Free Markets Fractured Our Society, “the triumph of free-market economics is sometimes illustrated by a satellite image of the Korean peninsula at night, the southern half illuminated by electricity, the northern half black as the surrounding ocean.”

Which means, lying adjacent to all the glossy prose we read about the success of the free market in bringing prosperity to its benefactors is the story of a dark continent of extreme inequalities and poverty that nobody really cares about.

The 2008 crisis wrecked the profession of economists and the effects of it continue…

Not the Nobel Prize: Finding fresh economics ideas for the 21st century

September 9, 2019

Promoting Economic Pluralism is an organisation aiming promote pluralism in economics.

It has instituted a new award – Not the Nobel Prize– which will be awarded on 3 October 2019, ahead of Nobel economics which is on 14 Oct. It says that Nobel prizes have been given to ideas which has led to ecological breakdown:

Our economic system is driving us towards a perfect storm. We are facing ecological breakdown. Rising debt is threatening a new financial crash. Inequality is pulling societies apart.

For 50 years, the scientific prestige of the Nobel Prize has given authority to economic ideas at the heart of this system. And even though the stark consequences of the 2008 financial crisis are still felt today, these out-dated ideas remain dominant.

We urgently need to reroute society away from this catastrophic path. That starts with fresh economic thinking.

Who are the thinkers and doers finding the economic solutions we need to meet the challenges of the 21st century? Help us find them and celebrate them.

And join the discussion about whether economics, as it stands today, is worthy of a Nobel Prize.

They have put up a list of new ideas which could be in contention for the prize on 3 October 2019.

Central Banks as Central Enemy and Saving central banks from Tweestorms

September 9, 2019

My article in BS over the weekend.

I reflect on this new trend of politicians using Twitter as a medium to attack central bankers. In particular, Trump’s attacks on Powell habe been both demeaning and threatening. Sure. Federal Reserve has made errors and so on and needs to be criticized. But that criticism should be more on policy rather than personal attacks as done by Trump.

 

 


%d bloggers like this: