ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Did This Straw Break the Finance Sector’s Back?

The world’s financial markets are hurtling towards a new phase of crises ranging from currency, to balance of payments, to sovereign debt, to banking crises. The monetary tightening policies of the United States Federal Reserve and the European Central Bank will only precipitate crises in emerging markets as well as peripheral eurozone economies, which will have global repercussions.

Miscommunicated Monetary Theory

The Modern Monetary Theory is described as an integration of endogenous money, state money, credit money, and functional finance theories. Despite departing from a faithful narration of what actually happens in the real world, the MMT arrives at a new world in which the government can spend as it pleases. Not only this and several other difficult-to-swallow claims, but also academic concepts such as vertical and horizontal components of money supply introduced along the way are what make MMT difficult to communicate to the general public and also difficult to fully appreciate.

Failure of Banking Regulation or Private Debt Build-up?

Towards a Safer World of Banking: Bank Regulation after the Subprime Crisis by T T Ram Mohan, New York: Business Expert Press, 2017; pp xvi + 166, $34.95.

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.

Bad Bank Proposal for India

There have been two main proposals to tackle the stressed assets problem of Indian banks since the beginning of this year. Both proposals are based implicitly on the financial intermediation theory of banking. The alternative credit creation theory of banking opens up other possibilities. One such possibility is a partial Jubilee financed by zero coupon perpetual bonds.

Is Brexit Moment a Lehman Moment?

The Lehman moment is the moment when Lehman Brothers—one of the largest investment banks in the United States (US) at the time—collapsed. The collapse happened on 15 September 2008. Almost nobody disagrees that the Lehman moment has been the most important moment in the ongoing global financial...

TINA, India and Economic Liberalisation

Although India has been "reforming" since 1991, almost nobody seems to be satisfied with either the progress or the outcome. The reformers need to put the economy's long-term interests above financial sector short-termism and reorganise the domestic financial system to keep credit productive. The debate on whether a bank should lend existing money or newly create the money it lends has major implications for monetary and fiscal policies, as well as for financial sector reforms.

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.)

People's Quantitative Easing

The Labour Party of the United Kingdom (UK) was defeated in the 2015 general elections on 7 May. The next day, the leader of the party, Ed Miliband, resigned from his post and triggered the 2015 Labour Party leadership election. The election concluded on 10 September and the result was announced on...

Banks, Not Tanks

An explanation of the crisis in Greece, its antecedents and causes and how it is being used to take over Greek sovereignty in a coup by the imperialist powers. What now for the project of a unifi ed Europe?

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