Financial Market

The Politics of Financial Stability
THE history of economic development has thrown up some interesting facets - some countries consistently create more wealth for their citizens than others. It is no surprise that banking systems differ across countries. Normally the performance of the Banking system is indicated by two criteria: availability and access to credit and the propensity for crises.These measures display dramatic and consistent differences across countries. Some countries create stable banking systems - that is, banking systems in which systemic crises are absent (can we consider ourselves among the favored few?), while others do not. Some countries create banking systems capable of providing abundant armslength credit, while others do not. A few countries manage to achieve both stable and abundant credit, while many others achieve neither. However, the models of financial systems in general and banking in particular do not have a parameter called “country” that could be used toexplain the differences in the financial systems.
Global Financial Stability Report
The Global Financial Stability Report examines current risks facing the global financial system and policy actions that may mitigate these. The April 2013 report analyzes the key challenges facing financial and non financial firms as they continue to repair their balance sheets and unwind public and private debt overhangs. Future potential and risk in economies: IMF The International Monetary Fund came up with Global financial stability report with focus on the key and structural challenges in euro area, potential risk in financial stability by accelerating capital flows in emerging economies. It examines the monetary policies of various economies and further risk that policy makers should look at and whether SCDS protection buying, indicator of credit risk, needed toban in European economy.
Simple Rules for Financial Stability
Ensuring financial stability is the goal of all governments and central banks. However, this is easier said than done. According to the IMF, the unconventional monetary policy steps taken by some of the governments – specifically in US, Eurozone, China and Japan have been effective in containing the economic and financial crisis at the same time reduced tail risks. These policies have reduced deflationary pressures, improved growth prospects and restored market functioning in theU.S., the U.K., Japan, and Euro area. However, the effects on other economies have been mixed. This is one step that the governments across the world used to ensure financial stability. The BFSI Research team explores four simple rules to ensure continued financial stability across the globe – the role of fiscal policy on financial stability, focus on macroprudential norms, implement a rules based monetary policy and take a look at the “Living Will” policy for SIFIs.
Capital Markets – Still a Rollercoaster Ride
The capital markets have been on a rollercoaster ride over the past few years. The markets scraped the bottom of the barrel in 2008 due to the crisis. The markets have recovered since then. But the going has not been smooth. Mr. Dinesh Thakkar, CMD of Angel Broking spoke to BFSI Vision on the Capital markets in India and what it means to be an intermediary in a cut throat market. We carry excerpts from his interview.