Essays on rational absurdity of banking
How policy priorities, regulatory choices, and institutional trade-offs shape banking outcomes, often in ways that differ from stated intent.
In a recent circular RBI has made a high decibel statement about the CRO’s independence and has put a lot of onus on the boards of NBFCs. Importantly, CRO office cannot be subordinated to any other department. But has the regulator stopped a tad short of empowering the position enough? Sumit Kakkar evaluates
Failure of a Systemically Important Bank amplifies the impact on world economy for two reasons. Firstly, banking services in many countries rely heavily on these banks. Secondly, it shakes customer confidence in banks which may trigger a contagion effect. How are such #TooBigToFail banks identified and monitored under current BASEL norms? Amit Balooni provides a quick overview of the process and its disadvantages
Helicopter Money is a monetary policy concept proposed by economist Milton Freidman to overcome the liquidity and rate transmission challenges. However like everything else in policy making, there are no free lunches. Himanshu Mehra explains the concept and its risks.
The recent report by Internal Working Group (IWG) of RBI has made recommendations that run contrary to the practice followed in internationally, especially the recommendation to would allow industrial groups to own banks. Predictably, the report has been controversial. However, lost in the noise is a set of implicit assumptions that the IWG seems to have made, that further weaken its contentions. Nishikant Das assesses these assumptions.