While the west continues to deal with the fallout of deregulated banks, the Reserve Bank of India has deregulated the interest rates paid on savings accounts. Rates in the largely state-controlled sector have been regulated at 3.5% for the past eight years, while inflation has been as high as almost ten percent. Commercial lending rates …
Continue reading “India’s banks raise savings rates to attract local capital”
Here is a series of fundamental points, and then a question: To pay off our existing debts we need the economy to grow Economists are expecting there will be a source of energy to power that growth But cheap oil has run out, oil is ‘peaking’ — supply may match but will no longer exceed …
Tying European countries together to form a single currency was always going to be difficult. Productivity is different in each country. And deeper than that, attitudes, lifestyles, and cultures are different. This is probably the reason why productivity levels across Europe have not converged. In the past decade productivity in Germany grew by 9.4%, while …
A short story about a bank that in the 1930s published a complete list of all its assets and liabilities, and showed how these made it a sound bank which therefore did not need to be tightly regulated. As the writer points out, steps towards greater transparency and disclosure would no doubt be resisted by …
Local governments have over-borrowed and are having cash flow problems. Beijing has allowed them to raise new money, via bonds (which previously were banned). This will help with short term cash flow issues, and buy time to get their borrowing in order. But the trend is that the situation is worsening. Much of the local …
Distressed banks that needed aid from European governments or the region’s rescue fund would be subject to restructuring or wind-down. Those, at least, are the draft guidelines being discussed this weekend. http://www.ft.com/cms/s/0/b013215e-fb02-11e0-bebe-00144feab49a.html
European regulators are seeking to introduce new rules for ratings agencies. Ratings would be suspended for countries undergoing bailouts. (But what counts as a ‘bailout’, and how would the EU prevents ratings being applied by entities outside the EU?) The issuers of financial products would be forced to change the ratings agency they use, possibly …
China’s economy grew by 9.1% in the year to 30 September, down from 9.5% in the year to 31 July. Inflation is just over 6% and the slowdown in growth is seen as beneficial in helping to slow this inflation and achieve a ‘soft landing’ for the economy. China is a strong focus for global …
Floods in Thailand have killed more than 300 people, inundated 1,000 factories (including those owned by Toyota, Western Digital, swamped large areas of agricultural land, and forced growth forecasts to be cut by around half (from 3.7% to just over 2%). Regional supply chains for companies including Apple have also been disrupted. Costs of clean …
America’s political power and influence will likely decline in parallel, although more slowly. This article argues that it is better to embrace this as a reality, rather than to seek ways to reestablish America’s dominance. http://www.ft.com/cms/s/0/0c73f10e-f8aa-11e0-ad8f-00144feab49a.html