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INTERVIEW
US
Economic Slowdown - Implications
-- Ben Bernanke (before the Senate Banking Committee)
Here,
Professor Charles Wyplosz expresses his valuable opinion
about the implications of the US economic slowdown.
© 2008 The Icfai University Press. All Rights Reserved
SPEECH
Financial
Market Excesses and Corrections : A Central Banker's
Perspective
-- Lucas Papademos
© Speech by Mr Lucas Papademos, Vice-President of the
European Central Bank, at the International Research
Forum on Monetary Policy, jointly organized by the Board
of Governors of the Federal Reserve System, the Center
for German and European Studies at Georgetown University,
the Centre for Financial Studies at Frankfurt University
and the European Central Bank, Frankfurt am Main, June
26, 2008.
COVER
STORY
Tectonic
Basel II Shift : Implications for the Indian Banking
System
-- Manoranjan Sharma
The
Indian banking system has made considerable progress
towards successful implementiaton of the Basel II framework
for capital adequacy. Taking into consideration the
state of preparedness of the banking system, however,
it has been decided to provide tectonic shift in banks
to put in place more appropriate effective risk management
practices so as to ensure full compliance with Basel
II framework.
© 2008 The Icfai University Press. All Rights Reserved
RISK
Risk
Management Systems : A Key Imperative for Indian Mutual
Funds
-- Krishnan Sitaraman
This
year risk management by mutual funds has posted interesting
as well as worrying results in the stock markets. Nearly,
half of the investors investing in mutual funds are
not properly managing or even controlling the risk.
Effective and sound risk management practices do not
exist. This article seeks to look at the key areas of
risk management for mutual funds and the need for an
effective medium for mutual funds in measuring and controlling
risk. It also looks at some of the high profile fund
failures which have taken place globally due to inadequate
risk management practices.
© 2008 The Icfai University Press. All Rights Reserved
RISK
Single
Platform : Two Risks
-- V Shunmugam and Niteen Jain
Fluctuations
in currency prices are one of the important sources
of risk that may impact the exporters as well as the
importers. With growing investor interest in commodity
derivatives as well as increasing focus on commodities
prices and forex prices due to changes triggered by
currency fluctuations, MCX has adopted a single trading
platform where effective leverage risk takes place in
both these markets.
© 2008 The Icfai University Press. All Rights Reserved
RISK
AStudy
on Future Potential of Commodity Market in India with
Special Reference to Rajasthan
-- Sumeet Gupta
Commodity market has been developed as a most vibrant
market in India with the introduction of liberalization,
privatization and globalization. Further, with the removal
of tariff and non-tariff barriers and the functioning
of the Forward Market Commission, this market has become
more transparent. This article throws some light on
the evolution of the commodity market and its future
especially in Rajasthan. This study is based upon the
findings regarding the brokers' awareness level and
their perception regarding commodity market and its
trading mechanism.
© 2008 The Icfai University Press. All Rights Reserved
TREASURY
Iceland
Feels the Heat
-- Swaha Shome
Iceland,
one of the most peaceful European economies, faced a
financial crisis in the last few months. The causes
were identified as unsustainable debt. Despite strong
fundamentals, the currency depreciated sharply against
the euro and dollar, and the central bank had to take
strong regulatory measures to control inflation. The
financial liberalization of Iceland in the past few
years allowed foreign capital to flow into the economy.
While this by itself was not a problem, the erosion
of investor confidence following the subprime debacle
in the US, and the deliberate maligning by the hedge
funds caused the economy to face a financial whirlwind
difficult to manage. This article explains the causes
of this unlikely crisis providing an outlook for the
country.
© 2008 The Icfai University Press. All Rights Reserved
TREASURY
Money
Illusion : Does It Really Matter?
-- Ritu Sinha
Money plays many roles in our lives. Money illusion
comes into picture when the real value of money is declining.
It refers to the phenomenon where people get confused
between real and nominal worth of money. This article
throws light on why people often pay more attention
to price tags than to real value of money. Money illusion
is responsible for many potential `anomalies' in human
decision-making and can also influence people's perceptions
of outcomes. This article further tries to establish
a relationship between money illusion and psychological
judgments and decision biases. It also analyzes the
effect of money illusion on reality markets.
© 2008 The Icfai University Press. All Rights Reserved
TREASURY
Freddie
Mac and Fannie Mae Crisis Amidst Us Mortgage Crisis
: No Solace Yet!
-- Ravikant
The
US subprime mortgage crisis is likely to continue cascading
into the markets and keep on pushing the economy downscale.
Now, much of the effect is passed on to the quasi government-sponsored
mortgage companies namely Freddie Mac and Fannie Mae
which are facing the crisis. This article discusses
the reasons behind the crisis.
© 2008 The Icfai University Press. All Rights Reserved
FOREX
Standard
& Poor's Indian Rupee Index : Global Recognition of
Indian Economy
-- Mandeep Bhatia
The significance of developing countries like India
and China cannot be undervalued in today's global financial
market. Slowly but consistently the global players of
financial market are recognizing this fact. The launching
of Indian rupee index and Chinese renminbi index by
Standard & Poor's (the world's foremost provider of
financial market intelligence) on March 3, 2008 into
the series of its globally-traded indices strengthens
the fact. This article throws light on factual details
of S&P's Indian rupee index, reasons behind its launch
and its effect on the Indian economy.
© 2008 The Icfai University Press. All Rights Reserved
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