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

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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.”

Credit Growth and Response to Capital Requirements

This paper makes an attempt to assess the impact of imposition of uniform capital requirement norm on flow of credit to the business sector by the most important segment of the Indian banking sector, i e, Indian public sector banks. A simple decomposition analysis of growth in assets portfolio as well as a model based analysis of credit growth for the Indian public sector banks corroborated that (a) in the post reform period, public sector banks did shift their portfolio in a way that reduce their capital requirements and (b) adoption of stricter risk management practice in respect of bank lending in the post reform period and its interplay with minimum capital requirements (regulatory pressure) have had a dampening effect on the overall credit supply.

Issues in Asset Liability Management - I

The subject of asset liability management is of relatively recent origin both internationally and, more so, in India. This is the first of a series of articles which will discuss the different issues involved, critically examine the maturity gap model, suggest alternatives, look at the principles of pricing deposits and advances and deal with connected subjects.
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