It was really interesting to note a fruit street cart sell the kiwi fruit in Bangalore:
Archive for March 19th, 2018
When kiwi fruit is sold on fruit street carts in India: Branding and commoditising of fruits
March 19, 2018How to establish a local bond market and avoid the original sin? Lessons from Germany..
March 19, 2018Interesting speech by Andreas Dombert of Bundesbank. She spoke at this conference organised by South African Central Bank.
She says countries should avoid borrowing in other markets which is also called as Original Sin in economics. They should try and develop their own bond markets:
What happens when a bank is put into curatorship: Case of VBS Mutual Bank of South Africa
March 19, 2018South Africa’s central bank recently put VBS Bank under curatorship as it was facing liquidity constraints.
Prof. of University of the Witwatersrand explains what it means to put banks under the curatorship in S. Africa:
In simple terms curatorship of a bank means that its board and executive management are relieved of their duties. A curator is appointed by the South African Reserve Bank in consultation with the National Treasury and the Minister of Finance. The curator takes over the full management functions of the bank with the purpose of rehabilitating it.
Curatorship is triggered by concerns about the management or financial viability of the bank. For example, if the board or executive management are found guilty of fraud, the central bank can remove them and appoint a curator to manage the bank until new management is put in place.
Financial viability concerns can trigger curatorship if a bank faces liquidity or solvency problems. This is what happened at VBS. The central bank’s view was that it faced a liquidity crisis – in other words it was running short of cash to meet its obligations, mainly repayment of deposits.
Liquidity problems happen when bank deposits are withdrawn at a faster rate than they can be replaced by new deposits. This is normally a temporary problem, as a well functioning bank can restore its liquidity levels by taking in new deposits or by reducing in its lending activities.
Banks can also face solvency problems. This is different to a liquidity crunch: it’s when a bank goes bust because loans it has made can’t be repaid. In 2001 a South African bank, Regal Treasury Bank went insolvent.
Although the South African Reserve Bank can still appoint a curator when a bank experiences solvency problems, the chances of recovery are slim. This was the case with Regal Treasury Bank which was placed under curatorship but never recovered. It was subsequently liquidated.
Always useful to know about types of banks in other countries and myriads of regulations around them…
How BIS got the name of the RBI Governor wrong!
March 19, 2018Dear BIS, it is Urjt Patel and not Nikhil Patel as you say it!
Nikhil Patel: Banking regulatory powers should be ownership neutral
Inaugural Lecture by Dr Urjit R Patel, Governor of the Reserve Bank of India, at the Centre for Law & Economics, Centre for Banking & Financial Laws Gujarat National Law University, Gandhinagar, 14 March 2018.
Cryptocurrencies present certain risks but also challenge the status quo
March 19, 2018Ousmène Jacques Mandeng and Piroska Nagy-Mohacsi sum up much of the view I have on cryptocurrencies:
The rise and fall of Travancore National and Quilon bank
March 19, 2018My recent Mint piece on the rise and failure of Travancore National and Quilon bank.
Of all the banking failures one has read, this was by far the most dramatic given the several actors and events in the failure. It was also one of those banks where the Government played a crucial role in ensuring the bank fails! There is also this unique Kerala setting with multiple communities involved in the failure.
However, I also wish to highlight that we should have done a lot better to understand previous bank failures. The PNB crisis is a time to reflect not just n making sounder banking policies for future but even document the previous ones rigorously :
Mostly Economics 
