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

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The Battle of GameStop

What the battle of GameStop has brought into light is that democracy in financial markets is just a myth: whoever controls the valves, controls the flow. The market-making and brokerage markets in the United States are heavily oligopolistic markets in which market-makers and brokers extract huge...

Illusion of Democracy in Financial Markets

Democratising of financial trading fails to recognise the skewed character of finance markets.

Reflections on Analytical Issues in Monetary Policy

Analytical issues have arisen in the conduct of flexible inflation targeting as the framework of monetary policy, adopted formally by India in 2016, despite the noticeable downward drift in the inflation rate and concerns of many economists about its relevance in the light of the global financial crisis. Issues such as the framework’s rationale, the medium-term inflation target, the meaning of real interest rate in the Indian context, the realism in respect of inflation expectations and of the inferred logic of the yield curve, and the implications for economic inequalities have been pointed out.

Vulnerability of Emerging Market Economies to Exogenous Shocks

The transmission of global demand, oil supply and monetary policy shocks on the Indian economy are empirically examined using a parsimonious structural vector autoregression model for the period 1996 to 2016. Global demand shocks exert the most dominant effect causing fluctuations in various macroeconomic variables, whereas global monetary policy spillovers play an important role in affecting domestic short-term interest rates and financial asset prices. Global oil supply shocks, given its relative weightage as an intermediate input, have a greater impact on wholesale price index inflation than on consumer price index inflation. Given the rising trade and financial integration of the Indian economy, a quantitative impact analysis of these global shocks assumes importance for macroeconomic and monetary policy frameworks.

Determinants of Bid-ask Spread in the Indian Government Securities Market

Liquidity measurement in financial markets has generated considerable attention in financial research. In this paper, the cost of liquidity is measured by computing the bid-ask spreads of liquid securities traded in the Indian government securities market, and is analysed with other liquidity measures. Overall, volatility is found to be the key variable impacting bid-ask spreads. Trading volume has a negative impact on spreads, although at a much smaller magnitude. Trade initiation and net liquidity appear to be smaller but significant drivers of spreads. Order imbalance and trade execution variables, analysed separately with the other variables, show divergent relationship with spreads.

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...

Reforming the Risky Financial System

Other People's Money: The Real Business of Finance by John Kay; New York: Public Affairs, 2015; pp 352, $27.99 (hardcover).

Financial Sector Reforms

Financial Sector Reforms and India’s Economic Development by N A Mujumdar (two volumes); Academic Foundation, Delhi, 2002; pp 319 + 328, price not mentioned.

Inter-State Water Disputes Act 1956

The National Commission to Review the Working of the Constitution (NCRWC) has recommended the repeal of the Inter-State Water Disputes Act (ISWD Act) and the enactment of a new Act. Its recommendation is to bring river water disputes within the original and exclusive jurisdiction of the Supreme Court. This article argues that the repeal of the ISWD Act would be singularly ill-advised. Article 262 together with the ISWD Act represents a very good mechanism for dispute-resolution (as a last resort when negotiations fail) and it would be a great pity to dismantle it. There have been some deficiencies in the functioning of that mechanism; the amendments to the ISWD Act passed in early 2002 seek to remedy them and some further improvements are suggested here. The NCRWC is right in wanting to restore the jurisdiction of the Supreme Court, but it should be appellate jurisdiction.

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