ISSN (Online) - 2349-8846

H T Parekh Finance ColumnSubscribe to H T Parekh Finance Column

Public Bank Privatisationin 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.

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.”

Has the Crash of the Global Financial Markets Begun?

Even as some insist that the global economy is in “secular stagnation,” the facts suggest that we may be entering the “worst” depression in history. The global markets have been on a slippery slope since the summer of 2007, and things have only been getting worse in 2016. The picture looks dismal, no matter which theoretical lens one uses. (This article was written on 5 February before last week’s tumble in global and Indian markets.)

Trade in Financial Services

Liberalising global trade in services, including financial services, has been on the cards for the longest time. Services trade negotiations at the World Trade Organization may "fail" at the Doha Round, but only because there has been no progress in agriculture and industrial goods trade.

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