ISSN (Online) - 2349-8846

H T Parekh Finance ColumnSubscribe to H T Parekh Finance Column

Weak Note of Caution on

The prolonged deployment of “unconventional” monetary policy responses that began in reaction to the financial crisis of 2008, especially “quantitative easing,” set off speculative investments and fuelled asset bubbles. Since they cannot allow the new bubbles to give in, policymakers must persist with decisions that inflate asset prices. By doing so, they end up sitting one more bubble on the previous one. The probability that one or both may burst has only increased.

Revamping Bank Regulation

One of Donald Trump’s big election promises was a substantial rollback of bank regulation. Trump and his Republican followers believe the regulations ushered in by the Dodd–Frank Act in the United States (US) are too onerous and too complex. They think it could render large US banks uncompetitive,...

Is ‘Islamic Finance’ Islamic?

Riba could mean usury, interest, economic rent and even surplus value (in the Marxian sense). Riba is “un-Islamic.” Without riba, capital accumulation, and capitalism itself will not be possible. However, those who own capital in the Muslim world have taken charge of defining what is Islamic and what is not. The result? They find ways to multiply it in modes that benefit only themselves, just as their non-Islamic counterparts.

Debts That Cannot Be Paid Will Not Be

Total global debt has increased, growth has been slowing down since the onset of the global financial crisis in 2007 and has been rapidly decelerating after 2012. This may be a sign that the world has arrived at its debt carrying capacity or has even crossed it, meaning that capitalism is probably already insolvent.

Public Bank Privatisation in a Post-truth World

The Narendra Modi government appears to have decided to privatise public sector banks (PSBs). Preparations are underway with arguments being marshalled that “there is no alternative” to privatisation. Noises of this kind have emanated often from the Reserve Bank of India (RBI) and government...

Strange and Worrying International Market Liquidity

There seems to be a rise in illusory liquidity in international markets, which appears to be plentiful in quiet times, but vanishes at other times. “Flash crashes” are more frequent. Reforms that have made banks safer have contributed to this, leading to a withdrawal of short-term market participants, and causing long-term investors to act short term. There seems to be a trade-off between day-to-day liquidity and what I call “systemic liquidity.”

Pages

Back to Top