Virtual banks to be licenced in Hong Kong..

February 12, 2018

Apparently Hong Kong authorities are thinking about opening virtual banks for a while. The first guideline was released in 2000 to be  updated in 2012 and is coming into action now.

What we see is that the concept is hardly new but the HKMA has made changes in the new guidelines based on banking developments.

First what is a virtual bank?

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Malaysia adopted inflation anchoring over inflation targeting…

February 12, 2018

Interesting speech by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia.

He says despite strong preferences to adopt inflation targeting before 2008, the central bank did not straightjacket itself. They had a broader role with focus on inflation anchoring and not targeting. This way they avoided groupthink as well:

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Comparing crypto currencies across three functions of money: medium of exchange, unit of account and store of value

February 12, 2018

Yves Mersch of ECB speaks about the hot topic of cryptocurrencies.

Mersch is one of those odd central bankers as he prefers physical cash over cashless world. In this speech, he also dismisses private cryptocurrencies as well:

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US History and the path to European Integration

February 8, 2018

Superb post by Prof Tim Taylor. He summarises this report (looks like a great read) by Adam Posen and Jacob Funk Kirkegaard.

This issue of how and whether Europe should become like US -as in one country- is always great to read. Lots of history here:

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Malawi central bank taking help of church to clean banknote usage practices in Malawi

February 8, 2018

Historically, there has always been this relationship between monetary authorities and religious authorities. The relationship has always been this topsy-turvy kind with one dominating the other over the period. There may have been rifts/conflicts but still the relationship was persisted.

This strong relationship has tempered down in recent years as central banks have become monetary authorities which have generally stayed away from religious matters.

Thus, it was Interesting to read this bit of central bank trivia. In  Malawi, people have not been using the currency notes properly leading to high damages in the notes. This leads central bank to print more notes than needed to replace the old notes leading to higher costs.

Thus, they have asked the church authorities to convey the message to people:

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Photo essay: Delight and wariness at India’s first floating market in Kolkata

February 8, 2018

Superb photo essay on floating market  at Patuli Lake in Calcutta. Moreover, establishing such a market in a place like Calcutta makes it even a better story.

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Independent fiscal councils and the conduct of fiscal policy

February 8, 2018

Voxeu has a free e-book and discussion on fiscal councils:

Money in the digital age: what role for central banks?

February 8, 2018

This is the title of the speech by Agustín Carstens General Manager, Bank for International Settlements.

He has this amazing money flower ( I think have seen it elsewhere as well, not sure where):

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Modernising India’ prisons: From prisons to e-prisons

February 7, 2018

Despite the dotcom bust, the letter ‘e’ continues to be used for anything modern.

Came across this government press release on modernising India’s prisons. There is an E-prison project underway:

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How Bank of Baroda’s misadventures dragged it into South Africa’s political crisis

February 6, 2018

A really gripping narrative by Aman Sethi and Gopika Gopakumar of HT.

A scandal involving Bank of Baroda’s South Africa operations, a cabal of businessmen of Indian origin, and South African President Jacob Zuma, has undermined the reputation of India’s second largest bank and resulted in an unprecedented penalty by the South African Reserve Bank.

It is a familiar story with different names…

How the Federal Reserve honored Janet Yellen by copying her sartorial style…

February 6, 2018

Janet Yellen’s tenure is being seen as highly successful and setting a new standard for current and future central bankers.

Though, what is interesting to note is how the Fed staff paid tribute to her during her last days at the central bank. They all popped their collars copying her style:

For the last week of US Federal Reserve chair Janet Yellen’s groundbreaking tenure, her coworkers are offering an homage to her distinctive sartorial style:

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How the Wright Brothers fought to stifle innovation..

February 6, 2018

Chris Calton on how Wright Brothers after getting the airplane patent stifled innovation in the industry. SO much so. US air industry developed only post Government limiting the monopoly power of patent:

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RBI Board remains empty which is such an enigma to understand…

February 5, 2018

Over the weekend, the Government appointed 2 members to the RBI Board:

In exercise of the powers conferred by clause (b) of the sub-section (1) of Section 8 of the Reserve Bank of India Act, 1934, the Central Government has nominated Dr. Prasanna Kumar Mohanty and Shri Dilip S. Shanghvi as Directors to the Central Board of the Reserve Bank of India for a period upto February 08, 2021 and March 10, 2021 respectively or until further orders, whichever is earlier.

So now the Board has 14 members:

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The Anchal Service: The postal services used in Travancore and Cochin

February 5, 2018

Brilliant post by Maddy’s Ramblings blog. This blog is the goto blog on nuances of Kerala’s history which is quite amazing to learn. The blog is an inspiration of sorts of being really meticulous in research and using the blog to share it with people.

In this post, he writes about the postal services used in Travancore and Cochin areas called Anchal Service (Wiki entry):

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Notes from Union Budget 2018-19: Cryptocurrency, Cryptoassets and Blockchain…

February 5, 2018

Apart from GIFT City, another thing I noticed in the Budget was Indian government’s worry over Cryptocurrency.

In his speech the FM said:

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GIFT city perhaps needs homegrown financial institutions as well..

February 5, 2018

Amidst all the Budget announcements and noise, the one on GIFT City caught my eye.

As a student of banking and financial history, one topic which is of huge interest is history of financial centres. How and why certain centres come to emerge as financial centres first at a national stage and then gradually to international/global levels is quite a study. If one understands this development, much of financial development becomes clearer. Alas, the interest in the subject is hardly much.

In this context, it is always exciting and interesting to learn about GIFT City in Gandhinagar, Gujarat. It is being shaped as an international financial centre by policymakers compared to the mighty Mumbai which evolved more naturally as a financial centre over a long period of time.

GIFT city was one of the top projects of the current Prime Minister when he was CM of Gujarat. Thusm the project has got mentions in the Union Budget.

In 2015-16, the Finance Minister said:

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The Purusharthi Refugee: Sindhi Migrants in Jaipur’s Walled City

February 2, 2018

Interesting paper by Prof Garima Dhabal of Presidency College:

This article seeks to understand the spatial arrangement of refugee groups within the walled city of Jaipur in the period after 1947, marked by the braided histories of partition and the merger of princely territories with the newly formed state of India. It focuses on the Hindu Sindhi refugees who had come to Jaipur, traversing the urban centres around the Rajasthan border, in the late 1940s and early 1970s.1 The process of incorporating the Sindhi community, mainly comprising trading groups, in the narrative of urban regeneration of the new provincial capital of Jaipur, was carried out through the trope of purushartha, which roughly translates to “hard work” with Hindu cultural undertones. However, this did not ensure their absolute inclusion in the representational matrix of the city, which is dominated by the image of Rajput royalty or Jain and Bania traders.

This makes the Sindhi purusharthi a specific category for the purposes of governance, but not a legitimate enough identity within the burgeoning discourse of heritage in Jaipur. The city wall also played a metaphorical role in this “inclusive exclusion” (Agamben 1998: 12) of the community. While the “walled city” absorbed them in the retail economy and benefited from their entrepreneurial practices, the recent resignification of the wall as “heritage” by the state authorities has also made the position of Sindhi retailers rather precarious in the new regime of valuation of urban infrastructure. The subsequent sections would further delve into these dimensions of the spatial arrangement of the “walled” enclave of Jaipur in relation to the Sindhi refugees through an ethnographic exploration of Indira Bazar, one of the market spaces created in the 1970s for rehabilitating this group.

 

Focus Economics: List of Top Economics & Finance Blogs of 2018

February 1, 2018

Focus Economics has updated its 2017 list of top economics and finance blogs.

There are quite a few additions and some others who continue to be included in the list. In all humility, Mostly Economics continues to be in the list. Thanks to the several visitors and well-wishers. Hope the momentum continues this year as well…

 

How Equity market and bond market are giving different signals about Indian economy…

February 1, 2018

One is still trying to figure the Budget hype and its impact.

But the broad trends in the two financial markets- equity and debt – are showing different signs (Mint edit):

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What does it take for family businesses to last generations?

February 1, 2018

Whether it is first or fifth generation, all boils down to governance:

Involving the next generation and preparing them to take charge is one of the big issues that crops up for family businesses. They also face many other challenges – transitioning to professional management, introducing governance among own family members, and so on. Building for perpetuity is a key challenge too. As Sonny Iqbal, Gurgaon-based co-leader of Egon Zehnder says, when they surveyed family businesses to find out their concerns, profit is often low down on the list. “Survival, sustainability, doing good, are often bigger concerns,” he says.

Eighty per cent of global corporations are family businesses. But according to the Family Business Institute, says Iqbal, only 30 per cent of these organisations last a second generation, 12 per cent remain viable till a third, and barely 3-4 per cent operate in the fourth generation or beyond. The reasons are multi-fold. Finding suitable successors, transitioning without losing vision and values, lack of governance can all derail companies. Not investing enough in innovation or digitalisation could be another.

But if you flip things around and ask why some family businesses are so successful, some common threads emerge. Says Iqbal, “ If the fundamentals of governance are solid, if the fundamentals of innovation are good and if the foundation has been laid in a thoughtful way targeting perpetuity, then usually there is longevity.”

Governance is key, both Riiter and Iqbal stress. And they are talking governance not just at the board level on company matters, but also at the family level. Explains Riiter, if by the fourth generation the family has some 600 shareholders, their roles, involvement, compensation and so on have to be spelt out clearly to everyone.

Hmm..


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