Wednesday , July 15 2020
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Amol Agrawal: Mostly Economics

Mostly Economics is an India focussed economics research blog run by Amol Agrawal. He covers a wide range of economic topics while frequently updating his audience on the Indian economy.

A 150-year-old US bank failure may still be haunting Black communities

Fascinating bit of banking history from US: Established in 1865, the Freedman’s Savings and Trust Company, or Freedman’s Bank, gave tens of thousands of former slaves access to financial services for the first time. It helped them save for big purchases and accumulate financial buffers to help soften the blow of income shocks. But it strayed from its initial mission as a depository institution, and when it failed in the 1870s, it was catastrophic for those families and communities who...

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Can London or Singapore become international renminbi hubs similar to London’s traditional role for Eurodollars?

Herbert Poenisch former senior economist at BIS in this piece reflects on history of how Eurodollar markets in London. Can similar Renminbi markets emerge as HK get integrated within China: The development of the Eurodollar market in London and elsewhere in the 1960s was of paramount importance for the leading role of the dollar today. China’s build-up of control over Hong Kong – a special administrative region that is also an international financial hub – throws up parallels and...

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25 years after the fall of Barings Brothers: Lessons not learnt

25 years ago the mighty British bank Baring Brothers was brought to knees by its trader Nick Leeson. G Sreekumar, formerly at RBI has a piece in Mint on the crisis and how we have not learnt the lessons from the crisis. Barings has passed into banking folklore. It is also a landmark case in the history of banking supervision. But, were any lessons learnt? The Basel Committee on Banking Supervision issued guidelines on supervision of financial conglomerates, cross-border banking, and...

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Could Quantitative Finance Help Avert Future Market Crashes?

Prof Joao Gomes of Wharton in this interview: [email protected]: Looking to the future, do you think quantitative finance can help predict future crises? If so, what can be done about it today? Gomes: Absolutely, yes. I have lived through several of these crises. [With] most of them, many of us were saying that there was a problem here, that something should be done, that markets were too hot and something should be done with some particular prices that were just out of line. The problem...

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RBI’s Liquidity Management in the time of current crisis

Radha Shyam Ratho and Pradeep Kumar of RBI in the July-2020 Monthly Bulletin article sum up the various liquidity measures taken by RBI: COVID-19 sent financial markets in India as also the world into a tailspin. Financial institutions were faced with liquidity stress, loss of access to funding and tightening of financial conditions amidst disruption of cash flows and working capital cycles. In response, the Reserve Bank deployed several conventional and unconventional tools to restore...

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Despite ongoing crisis in Europe, membership to Euro grows

Several articles point how European monetary union and Euro will not last. But the number of European countries wanting to join Euro keeps growing. Croatia and Bulgaria have joined ERM-II, a stage before final adopting of Euro: Croatia At the request of the Croatian authorities, the finance ministers of the euro area Member States of the European Union, the President of the European Central Bank, and the finance ministers and central bank governors of Denmark and Croatia have decided,...

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Pope names Mario Draghi to a Vatican panel

Fascinating bit of news over the weekend. Pope appointed Mario Draghi as member of the Pontifical Academy of Social Sciences: Mario Draghi, the former head of the European Central Bank, has been appointed by Pope Francis to a Vatican advisory panel, the Holy See said on Friday. The pontiff named Draghi, 72, as a member of the Pontifical Academy of Social Sciences. An economist who received his doctorate from the Massachusetts Institute of Technology, Draghi had served as Italy”s central...

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What happens when post-Covid economists, who didn’t write exams, knock at RBI’s doors?

Manasi Phadke, one of my favorite economists who use humor in economics writes a piece after a long time. She writes on how economics students who are not able to take exams and learning economics on Amazon Prime and Netflix! And what happens when these students line up for interviews at RBI? Read on.. This entry was posted on July 13, 2020 at 9:58 am and is filed under Central Banks / Monetary Policy, Indian Economy/Financial...

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What explains the differences between rising stock markets and declining economic prospects?

Prof Robert Shiller in this Proj Synd piece: The performance of stock markets, especially in the United States, during the coronavirus pandemic seems to defy logic. With cratering demand dragging down investment and employment, what could possibly be keeping share prices afloat? The more economic fundamentals and market outcomes diverge, the deeper the mystery becomes, until one considers possible explanations based on crowd psychology, the virality of ideas, and the dynamics of...

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