Podcasts about NPAS

Play Episode Listen Later Dec 1, 2022 27:14

In the last ten years, Indian banks have written off loans worth about ₹10 lakh crore. This helped the banks reduce their NPAs by 50%. But tellingly, they were able to recover only 13% of the loans written off – a very poor rate that raises many questions, for it is generally not easy to get a loan from a bank, and banks have many options for recovering loans. Another interesting aspect of the write-offs is that the bulk of the NPAs were from big corporate borrowers, with the NPA rates among smaller borrowers such as microenterprises being much lower. So, why do banks write off big ticket loans? Why is the recovery rate so poor? And how does the combination of massive write-offs and poor recovery rate affect taxpayers?

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#192 From Local to Global

The Manila Times Podcasts

Play Episode Listen Later Nov 27, 2022 18:25

India Policy Watch: State Capacity, the Smart Parking EditionInsights on domestic policy issues— Pranay KotasthanePublic policy is all around us; observing the same public space over time can reveal much about public policy, implementation, and state capacity. So, I'll try something different today. I will narrate the story of a parking policy reform, which I've observed closely over the last couple of years. In it are lessons for government contracting, deployment of technology, and public choice. Drop a reply if this story resonates with you or if you have other such anecdata in mind. The Pre-reform SituationMG Road is a busy thoroughfare in Bengaluru's Central Business District. Well-known shops, pubs, restaurants, and offices line the road. As you can imagine, many office-goers and business owners commute to MG Road and park their vehicles next to the curb. On weekdays, finding a vacant parking space after 9 am is a sure-shot sign of divine intervention. Even though curbside parking is not chargeable nominally, scarcity causes Coasian transfers to originate. An informal cohort of unauthorised Parking Marshalls emerges. These marshalls help vehicle users negotiate parking in return for a fee. After multiple complaints about this “rent-seeking”, the city government puts up free parking boards and demarcates parking bays for two-wheelers and four-wheelers.A reduction in the real price of parking leads to increased demand. Office-goers rush towards the city centre earlier than usual. The threshold beyond which parking became an ordeal moves up to 8.30 am, after which people have to park about half a kilometre away in a designated paid parking. And since the Traffic Police have no capacity to enforce parking rules except once in a moon, you would usually encounter double-parked vehicles on MG Road, usually cabs. Some shops even employ valets to double-park customers' cars, which are slid into vacant parking slots as soon as they become available. The motorable road width decreases because of these double-parked vehicles. It is quite a chaos. The Smart Parking ReformThe paid parking reform had been mooted on several occasions but wasn't politically palatable. Finally, the city government bit the bullet after the first COVID-19 wave. BBMP —the city municipal corporation—realised that its tax revenue sources had thinned. And with an ongoing hoarding ban and a newly launched GST, revenue generation options had narrowed further. That's when the Overton Window for paid parking opened up. Given the lack of state capacity, BBMP doesn't usually do parking enforcement itself. So it enters into a public-private partnership in which one company Central Parking Services (CPS), is granted a contract for parking on ten major roads in the city's Central Business District for ten years. Reports suggest that BBMP expected Rs 31.56 crore annually through this arrangement. To prevent corruption, BBMP employs technology. Curbside parking spots are clearly marked and numbered. Sensors are installed on each slot to identify the presence or absence of a vehicle. Customers can book a parking slot on arrival via an app and pay seamlessly through UPI/card/or wallet. Parking kiosks are also installed on footpaths for people who don't have the phone app. To encourage digital payments, cash payments are made costlier by 16.6%, i.e., Rs 30 in cash grants parking permission for 50 minutes, while the same amount paid digitally allows you to book a parking slot for 60 minutes. For a detailed account, see this Deccan Herald report. To help people transition, parking charges are waived for the first week of operations. Thereafter, cars have to pay Rs 30 per hour.Now, guess what would have happened? Can you anticipate the unintended consequences?Post-reform observationsPricing a resource according to its scarcity leads to a more efficient resource allocation. We saw that scarcity principle play out here. Soon enough, you could find a parking slot at any time of the day. The contractor employed several uniformed parking marshalls to prevent double-parking and unauthorised use. The same road you saw above now started looking as below:The story doesn't end here, though. It's not as if parking requirements are this elastic in the central business district, and it's not as if the city has reliable public transport options. What really happened was the displacement of parked vehicles from MG Road to a nearby residential road and a parallel thoroughfare. To avoid paying the parking fee, people started parking vehicles on other roads, sometimes right under “No Parking” signs. These infractions were uncommon earlier as these roads were patrolled by traffic police vehicles. But with the enforcement contracted out to a company in the surrounding area, perhaps the incentive for the Traffic Police to patrol the area decreased, as public choice theory would predict. And so, while the parking situation on MG Road improved, other neighbouring roads became free parking lots, causing congestion and unchecked traffic rule violations. As for MG Road, the “smart” parking didn't remain smart for long. The sensors for most parking slots stopped working soon. The app and the kiosks showed a parking slot as" “empty” if you parked a vehicle there. At other times, it showed unpaid bills of previous customers. On one occasion, the app asked me to pay a parking fee of Rs 18,290!Despite repeated calls to the grievance contact number, the contractor didn't seem to be interested in getting these fixed. The profit motive would have suggested that the company would aggressively keep all sensors active, but that's not how it played out.As public choice theory would predict, corruption didn't go away. The situation was much better than in the past. Nevertheless, since the sensors weren't working, the Parking Marshalls sensed an opportunity. The system allowed them to reset or extend the parking time limits at the kiosks. Some of them started striking side deals with regular commuters. The parking marshalls also enjoyed discretion in enforcing steep fines for overparking. Since there was no robust check to track fines, they could strike a deal with the customer instead of registering an official fine. Zooming OutThe marginal benefits of the parking policy reform are greater than the marginal costs; hence, it should continue. But it is still a work in progress. Contracting out doesn't obviate the need for enforcement entirely. My anecdata reiterates one important lesson in public policy: better contracting or procurement also requires state capacity. Without having built that muscle, contractors can easily take governments for a ride. As Chitgupi, Gorsi, and Thomas write in their LeapJournal article titled Learning by doing and public procurement in India:Procurement is an expertise. No government organisation can sporadically do this well. It is an expertise which can be built, albeit over many years. In any government organisation, people and processes can be organised to focus on this expertise, and to devote time and effort on the entire pipeline of government contracting. The process of developing this capability can be accelerated by bringing in people with this specialised expertise. Strengthening the entire life cycle is required to successfully spend budget amounts. But this is only the beginning of success in procurement where government can contract to deliver quality projects efficiently, on time and at low cost.Applications for the re-awesomed Post-Graduate Programme in Public Policy are now open. Check details here.Global Policy Watch: End GameInsights on global policy issues — RSJSome recent inflation prints from the US and other developed markets suggest the central banks are winning the fight. In India, too, the inflation expectations are getting less hawkish. Is this true, or is there more to this? A bit of a diversion here. A few editions ago, I pointed out how the ECLGS scheme launched during the pandemic to support the MSME sector had worked out well in India. The sovereign promised the banks they would guarantee the loans they disburse as part of this scheme. The banks could continue to use their underwriting norms without making them too stringent because of overthinking the negative impact of the pandemic on these businesses. The bank could, therefore, support these businesses, and as it has turned out, that's all that was needed to keep this sector above water. The government didn't have to dole out loans themselves, and the banks did what they do well, namely, underwrite, disburse and collect. Net result: the system NPAs for this scheme will end up in the 3-4 per cent range in line with this kind of portfolio in normal times. I bring this up because while writing about this last month, I thought it would be useful to check if other governments went down this path during COVID-19. It turns out yes, they did. Most of western Europe did the same. Over 60 per cent of new loans in France were guaranteed by the sovereign. In Germany, it was over 40 per cent, and now they have come up with a fresh scheme to stave off the energy crisis emerging from the Ukraine conflict. In Italy, not only were fresh loans state-backed, but they also rolled over older credit to these new schemes. This seems to be becoming a thing.Governments seem to have hit upon this nice little trick where they don't have to raise debt or taxes to manage a crisis. They simply need to offer credit guarantee through banks. It will sit on their books as a contingent liability and won't show up in debt ratios. Nobody gets hurt. Neat.So, why did I bring this up while talking about inflation? Since the global financial crisis (GFC) of 2009, the debt-to-GDP ratios in the developed economies have only moved one way. Up. Then we had the pandemic in 2020. Governments threw more money at the problem. The result is we have debt-to-GDP ratios upwards of 250 per cent in most OECD countries now. Two problems have arisen because of this. One, this indiscriminate money supply plus some supply chain constraints have meant inflation has hit multi-decade highs. Notwithstanding all modern monetary theory hypotheses that were in vogue a couple of years back, it turns out that more M4 money in the system will lead to higher inflation. And inflation hurts the poor most. Second, the system is vulnerable to collapsing at such debt-to-GDP ratios with the smallest of shocks going forward. I mean, how long can you keep kicking the can down the road?So, the inevitable has happened over the past six months. Central banks have raised interest rates in a dramatic manner to tame inflation. This seems to be working, as the slowing of headline inflation number suggests. But I am not sure about it. Most of the recent reduction comes from the fall in prices of the more volatile commodities. In fact, the ‘sticky' part of the consumption basket seems to be still in inflationary mode. Also, the rising rates have killed growth in most developed economies. They are in a recession. And while the employment data suggests that jobs are being added, if you look closely, the worm is beginning to turn. The slowdown across sectors will mean layoffs, consolidation and a reduction in capital expenditure. The employment rate will soon start falling. With that backdrop, what are the choices available to a government? I see a likely scenario that brings these various tugs and pulls together for a short-term fix that might appeal to them. I will elaborate below.Now that inflation has touched multi-decade highs, and we are at that point in the rate hike cycle where we have pretty much killed growth in the short term, there isn't more elbow room to increase rates. Inflation may subside a bit as supply constraints reduce, and maybe the war in Ukraine ends. But this is an opportune time for governments to reset inflation expectations upwards among its people. If you were running an inflation targeting model with a two per cent threshold (like in the US), it is somewhat easier now to raise it to 4-6 per cent without much furore. If you were running it at a 4-6 per cent range (like in India), you could reset it to 6-8 per cent. The Overton window is available for this. I think the governments will willingly take it. A slightly higher inflation expectation, without it becoming runaway, will allow central banks to pause raising the rate. It will also increase nominal GDP. This is important because a two per cent upward reset of the inflation target will lead to a corresponding increase in the nominal GDP. And increasing nominal GDP through higher inflation is the easiest way to reduce debt to GDP in the system for a government. Cutting costs and tightening the belt are all difficult ways of balancing the budget. Nobody wants to do that. In the past, letting inflation run high was unacceptable to any incumbent government. But the way the cards have fallen in the last six months, the governments can get away by citing forces beyond their control. I think no government will look this gift horse in the mouth. They will reset inflation targets. Now doing this means what's called financial repression. That is, the savers will lose because their savings will be undercut by inflation in future. So, this will have to be done gradually. But I see this level of financial repression as inevitable. The success of credit guarantee schemes opens another front for governments. As I mentioned, the governments will do more of this because why not? So, in some sense, you will see a capture of private credit by government-directed guarantee schemes. It won't be as much in India, but I see it quite likely in the developed economies. So, it is likely that while the economy will head to a recession, private banks will continue to supply credit because of these sovereign guarantees. There's a likelihood that bond traders will take a dim view of this and push up yields significantly. But there are multiple tools with the government to force pension and insurance companies to buy government bonds. This will rise. Yield curve management isn't a big deal anyway if central banks decide to do it. So, no fear on that front too. This will mean we could have continued credit expansion backed by the government in the near future without the fear of a rating downgrade. If you combine that with the developed economies bringing manufacturing back from China into their own countries, we could have a capex-led boom beginning soon after we have brought inflation into the new target limit. Of course, I'm not saying I support this kind of state intervention that pushes credit in the areas it wants to focus on instead of the market allocating capital in the most efficient way. In the long run, the state will make the wrong choices driven by its political objectives. But we will have to wait for the cycle of boom to first play out before that kind of bust unfolds. This might take a decade or maybe more. I am, therefore, sceptical of those who suggest a deep recession or stagflation is around the corner for the global economy. There will be a short recession, but other options are available for the state to manage this and push a real reckoning into the future. Stagflation might be the end game, but that end is not nigh. HomeWork* [Paper] Internal Drivers of China's External Behaviour by Amb Shivshankar Menon is really helpful in understanding China's recent actions. This line in the paper struck me (There's a useful 2x2 matrix in it):“Today, China faces an unprecedented situation at home and abroad and is therefore reacting in new ways. China is more powerful than ever before but is also more dependent on the world. This is an unprecedented combination, not known in Chinese history—not in the Han when she had to ‘buy' off the Xiongnu by marrying Han princesses off to steppe leaders; nor in the Song when she was one and sometimes the weakest power in a world of equals; nor in the high Qing when she was powerful but independent of the external world, as the Qian Long emperor reminded George III in writing.”* [Book] The High Costs of Free Parking by Donald Shoup is essential reading on parking policy.* [Paper] Which social welfare policies should the Indian government prioritise? This paper does a cost-benefit analysis to answer this important question. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit publicpolicy.substack.com

OPINION: Are NPAs martyrs or casualties of the war they waged? | Sept. 19, 2022

Play Episode Listen Later Sep 18, 2022 7:51

https://www.manilatimes.net/2022/09/19/opinion/columns/are-npas-martyrs-or-casualties-of-the-war-they-waged/1859027Subscribe to The Manila Times Channel - https://tmt.ph/YTSubscribe Visit our website at https://www.manilatimes.net Follow us: Facebook - https://tmt.ph/facebook Instagram - https://tmt.ph/instagram Twitter - https://tmt.ph/twitter DailyMotion - https://tmt.ph/dailymotion Subscribe to our Digital Edition - https://tmt.ph/digital Check out our Podcasts: Spotify - https://tmt.ph/spotify Apple Podcasts - https://tmt.ph/applepodcasts Amazon Music - https://tmt.ph/amazonmusic Deezer: https://tmt.ph/deezer Stitcher: https://tmt.ph/stitcherTune In: https://tmt.ph/tuneinSoundcloud: https://tmt.ph/soundcloud #TheManilaTimes Hosted on Acast. See acast.com/privacy for more information.

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Is it the right time to invest in consumer financiers?

Play Episode Listen Later Sep 16, 2022 4:28

The festive season is set to dawn upon us in about a fortnight. With no pandemic blues souring the sentiment this time, the pent-up demand is set to bring cheers to India Inc. To that effect, demand for consumer loans is likely to get a big leg up in the coming months. A Crisil report recently pointed out that non-bank lenders' asset growth is expected to jump to a four-year high of 11-12% this fiscal. According to the agency “With NBFCs focusing on higher-yield segments, unsecured loans, which have the second-largest share of 16-20% in the AUM pie, may be the only segment to touch the pre-Covid era growth of 20-22% this fiscal.” The growth, therefore, is keeping analysts upbeat about consumer financiers. Siddharth Purohit, Principal Officer and Fund Manager, InvesQ Investment Advisors says festive season to be without Covid-19-related restrictions for the first time in two years. Balance sheet clean-up has happened; no serious asset quality threat. Lower incremental provisions to boost earnings. Consumer financing companies have healthy pricing power; rising interest rates not a concern. Analysts say, investors should watch out for any spike in non-performing assets one or two quarters down the line. Ambareesh Baliga, Independent Market Analyst, says consumer financiers have been doing well. Credit off take has been impressive. There is pain in the lower segment; watch out NPAs levels in the quarters ahead. At the end of the June quarter of FY23, Bajaj Finance, which is India's biggest consumer financier, had gross NPA of 1.25% as against 1.6% in Q4FY22 Net NPA, meanwhile was 0.51%, down from 0.68% sequentially. For Shriram City Union Finance, GNPA stood at 6.11% in Q1FY23 versus 6.31% in Q4FY22, while NNPA was 3.32% as against 3.30% in Q4FY22. Yet, analysts believe that consumer behaviour isn't as bad as feared. Therefore, there isn't any serious concern on the NPA front for now. From an investment viewpoint, analysts suggest accumulating Bajaj Finance and M&M Financial Services from a long-term perspective. This, they said, should be done on dips as valuations look expensive at current levels. On Friday, investors will prepare themselves for the US Fed's meeting, slated next week. Other global cues and stock-specific news flow will guide the markets.

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Mark Chutkow and Jason Ross on Monitorships [Podcasts]

Compliance Perspectives

Play Episode Listen Later Jul 21, 2022 16:14

By Adam Turteltaub For a time monitorships were, if not endangered, out of favor. After many years of embracing them, the US Department of Justice had begun calling for cost benefit analyses and looking for alternatives. Then in 2021 Deputy Attorney General Lisa Monaco gave a speech announcing that the previous policy had been rescinded and that more monitorships would be coming in deferred prosecution agreements (DPAs) and non-prosecution agreements (NPAs). “I am making clear that the department is free to require the imposition of independent monitors whenever it is appropriate to do so in order to satisfy our prosecutors that a company is living up to its compliance and disclosure obligations under the DPA or NPA.” In this podcast Dykema's Mark Chutkow and Jason Ross explain what to expect when a monitor is appointed. First, recognize that different monitors will approach the job differently. You will need to understand if they are pragmatic, open-minded, familiar with the industry's risk and challenges, and have a record as a monitor. Typically, these questions are already answered since companies generally have a say in who their monitor will be. But, if your organization is the exception, do your homework on the monitor. Take time, too, to understand what the scope of the monitorship is. Also, make sure employees understand the role and benefits of a monitor. Leadership and the compliance team need to work to reduce any negative impressions that employees may have so as to facilitate a construction relationship. To that end, take the time to educate employees that the monitorship will, in the long run, help them. Once the monitor arrives, expect him or her to want to conduct interviews with individual at all levels of the organization in an effort to better understand the company. The monitor will likely want to understand the pressures middle managers are under and the expectations they are setting for those who report to them. Front line workers will likely be asked if they are comfortable speaking up and raising issues. The monitor may even reach out to customers and suppliers. As for the compliance program, itself, expect the monitor to focus on whether it is properly resourced and implemented. Turning to the ongoing working relationship during the monitorship, they warn that there will be tension periodically since the monitor is an outsider, but there needs to be some level of unity to ensure that the relationship is productive. Finally, they discuss the importance of metrics. The DOJ has made it clear that it expects data analytics from organizations when it comes to their compliance programs. Listen in to learn more about the changes and how to prepare for and succeed during a monitorship.

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#176 Of East Asian Transformations

Play Episode Listen Later Jul 10, 2022 21:57

Global Policy Watch #1: The Road Not Taken Insights on policy issues making news around the world— Pranay KotasthaneEast Asian economic success is one of India’s favourite public policy discussion themes. Regardless of the facts, we have strengthened our own beliefs based on that transformation. For instance, many Indians are convinced that South Korea, Taiwan, and Japan became powerhouses through well-executed industrial policies in which governments threw their full weight behind specific domestic sectors and companies. East Asian examples are often used to justify India’s protectionist trade measures, a business environment that places higher compliance requirements on foreign companies, and generous pro-business subsidies. In this debate, we forget the role of two other crucial factors. One, the role of geopolitics. As Arthur Kroeber’s notes in China’s Economy, Japan, South Korea, and Taiwan were part of the US alliance structure and benefited immensely from programs of technical assistance, educational exchanges, and access to the American market.Two, what’s more significant is that South Korea’s transformation as an export powerhouse predates industrial policy measures. Like India, South Korea too had a scarce foreign exchange reserves problem. Like India, it too opted initially for trade and monetary policies ostensibly aimed at preserving these reserves. But starting 1964-65, South Korean leaders—nudged by the US—were able to reimagine a future in which their foreign exchange problem was to be ameliorated not by import controls but by increasing exports.To explain the freakish similarities and differences between the paths India and South Korea chose, read these excerpts from an excellent NBER paper From Hermit Kingdom to Miracle on the Han: Policy Decisions that Transformed South Korea into an Export Powerhouse by Douglas A. Irwin. The economic problems of the 1950s South Korea were uncannily similar to India:Korea’s economic policy in the 1950s was built around “the three lows”—low grain prices, low interest rates, and a low price of foreign exchange—and the controls needed to maintain them. Although the controls led to perpetual shortages of grain, capital, and foreign currency, each had a rationale. The government sought low grain prices to keep the cost of living down, relying on grain imports from the United States made available through PL 480 (food assistance) grants. The government maintained interest rate ceilings, ostensibly to help borrowers and promote investment, but negative real interest rates meant there was little incentive to save, diminishing investment and financial development. The government kept the price of foreign exchange artificially low to make imported goods, particularly capital goods, cheaper than they otherwise would have been.The shortage of foreign exchange led the government to introduce import controls to conserve foreign exchange reserves. Import licensing was introduced in 1946 to impede the purchase of nonessential foreign goods. In 1949, the Ministry of Finance began preparing a quarterly foreign exchange budget to determine how export earnings and aid inflows should be allocated in purchasing imports.The overvalued currency had a devastating effect on the country’s merchandise exports, which declined from $40 million in 1953 to just $16 million in 1958, a year in which imports were $370 million.South Korea too had an aborted devaluation attempt in the 1960s. The government devalued the won in two steps… The February 1961 devaluation was made in conjunction with a major reform of the foreign exchange system. The government rationalized the complicated multiple exchange rate system and began to relax import controls, paving the way for a fully unified exchange rate in June of that year.The devaluation increased exports significantly, but caused pain in the short term.In the first two months of 1961, prices rose 15 percent, and industrial production, which depended on cheap imported intermediate goods, fell.21 The devaluation hurt the political fortunes of the deeply divided government, which went through several major cabinet reshuffles during its short period in power and never enjoyed strong public support. The government was widely seen as inept, and public dissatisfaction with the country’s situation led to protests. After renewed political unrest and street demonstrations by students, a military coup overthrew the nine-month-old government on May 16, 1961.Changing tack, the incoming military rulers opted for atmanirbharta:The government envisioned state investment to build up heavy and chemical industries to increase national security and end the country’s dependence on US aid and foreign sources of supply. Given Korea’s enormous trade deficit and tiny export base, the government thought it easier to replace imports by expanding domestic production of those goods rather than to try to make up the gap by exporting more. The plan was to make the country self-reliant in its ability to pay for its imports, but the plans were formulated “without due consideration of Korea’s short supply of capital and technology,”This plan failed as each of these required more foreign exchange, which was the limiting condition. Then came a food crisis.The US also withheld economic aid from Korea, including PL480 food assistance at a time when food was in desperately short supply. In April 1963, Korea agreed to a new stabilization program to reduce the budget deficit, in the hope of bringing inflation under control. The government also agreed to dismantle trade controls and eventually adopt a floating exchange rate. Aid was released, but by July it was clear the government was not living up to the agreement.Things begin to change after elections in 1963. Eventually, the government went ahead with another devaluation, and a slew of decisive policy reforms in 1964-65.In essence, Kim believed that the government would have to get rid of “the three lows”—the low exchange rate, the low-interest rate, and low grain prices—as well as reform the foreign exchange system. The devaluation had already raised the exchange rate; getting rid of low interest rates and low grain prices would be deeply unpopular. Said one leader: "“Eventually, the entire business world will protest the policies. Plus, the National Assemblymen will join them and intelligent media editorialists will criticize the policies . . . it will be very difficult.”The government began promoting slogans such as “exports alone promise a way to economic self-reliance” and “exports as the yardstick to measure the sum of our national strength”The economy started reaping the rewards even before the industrial policy kicked in:“The export success of the 1960s and 1970s was basically due to the removal of impediments to trade, namely, the complicated foreign exchange system and the negative effects on export of the protectionist import policy,” “Once the impediments were removed, the economy began realizing its huge export potential, which had been left unexploited until then."So next time someone sings paeans about South Korea’s industrial policy success, do tell them aap chronology samajhiye.Thank you for reading Anticipating the Unintended. This post is public so feel free to share it.The global outpouring of respect and admiration for Shinzō Abe is proof of his outsized impact on Japan and the world. To put his economic contributions in perspective, here’s an edited version of RSJ’s essay on Abenomics from edition #69.Global Policy Watch #2: Abe Yaar! Lessons From 'Japanification' (From our Archives) Insights on policy issues making news around the world—RSJShinzō Abe, the longest-serving Japanese PM ever, stepped down from office last week. His second term which began in late 2012 was marked by his prescription for reviving the Japanese economy. The world called it Abenomics.Through a mix of unconventional monetary policy, robust fiscal stimulus, and structural reforms to boost growth, Abenomics was seen as a marked departure from the timid response that characterised the previous regimes. Abe was determined to jolt Japan out of the economic morass it had dug itself in for over a quarter-century since 1990. We will discuss Abenomics and what lessons it holds for us in more detail later. But let’s go back to the lost decades of Japan that gave us the pejorative term ‘Japanification’ and understand what happened during that time.Bubble, Bust And No RecoveryJapan was the miracle economy following WW2, benefitting from U.S. largesse in infrastructure spending, government investments in technology and research, a rise in entrepreneurship and an increase in factor productivity for over three decades. Low-interest rates and all-round prosperity in the 80s led to an asset bubble. The stock market and real estate valuations went through the roof on the back of speculations and easy credit policy. There’s an urban legend (or truth?) of three sq. mts. of land near the royal palace being sold at US$ 60,000. That meant the appraisal value of the palace was more than the state of California then. In little over 25 years from 1960, the land value went up by 5000 per cent in Tokyo and other major cities. By the end of 1989, the Nikkei index was at its historic high of 39,000. This was a bubble and like all bubbles, it popped in 1990.Japan hasn’t recovered since. The obvious reasons were discerned immediately. The policy response to the bubble was to increase interest rates and quell speculation. But as the equity market and real estate prices crashed, borrowers who had overleveraged themselves were trapped. A debt crisis soon followed with widespread loan defaults. The contagion now engulfed Japanese banks which were staring at a huge pile of NPAs. The credit dried up, investments fell, and the growth slowed dramatically. The sentiment turned negative and the consumers cut down on spending. This began a deflationary cycle.The Bank of Japan (BoJ) was slow to respond and the deflation spiral set in. Why would you spend today when you know the prices would be lower in future? BoJ began cutting interest rates and brought it below 1 per cent by the mid-90s to spur investment. But these actions weren’t coordinated with a fiscal response. The hike in consumption tax in 1996 meant the further dampening of consumption sentiments. The loan default crisis led to the collapse of three banks in the mid-90s. By 1997, as BoJ and the government were getting their act together, the Asian financial crisis dealt a crippling blow to the economy. This set it back for another three years.What Went Wrong?Krugman in 1998 argued the lost decade of the 90s was because of monetary policy failure. His view was the BoJ should have publicly taken a high inflation target that would have avoided deflation and prevented interest rates from going down to zero. Of course, this is supported by theory. A higher inflation target anchors inflation expectation at a higher number and this increased expectation, in turn, leads to higher inflation because of the forward-looking aspect of the aggregate supply equation. Further, the increase in inflation expectation would reduce the real interest rate because it takes time for the nominal interest rate to reach its long-term level. In the short term, this reduced real interest rate stimulates growth which in turn increases inflation. A kind of a virtuous cycle sets in.Anyway, this wasn’t done by BoJ. The other option was to reduce the interest rate to zero quickly and provide substantial monetary stimulus quickly to check loss in output. A combination of a high inflation target (as suggested by Krugman) and monetary easing policy could have possibly worked.Between 2001-06, the BoJ went on a quantitative easing overdrive purchasing long-term Japanese government bonds. After the global financial crisis of 2008-09, the BoJ extended this programme to purchase private-sector financial assets including corporate bonds, ETFs (therefore equity in private companies), CPs and invest in real estate investment trusts (REITs). This had an impact on financial markets with stock markets rising, a fall in bond yields and an increase in corporate bond issuances. But this expansionary policy came at a cost. The debt to GDP ratio which was around 60 per cent in the 90s went up to 240 per cent by 2012. However, all of these measures didn’t move the needle on inflation. It is possible a higher purchase of private risky assets like corporate bonds and commercial paper instead of government bond would have spurred growth and raised inflation expectations. But that was not to be.Separately, the lack of coordination between monetary and fiscal policies hurt the economy. There were multiple increases in taxes to balance the budget while the monetary policy was working to increase consumption sentiments. Lastly, there was a lack of clear communication to manage expectations among the public about long-term inflation, interest rates or growth. Forward-looking guidance by the central bank on these parameters provides assurance to market participants more so when the financial system is weakened by high NPAs and general risk aversion. A recent example of this was seen when the US Fed indicated it will purchase corporate bonds as part of its stimulus during the pandemic. The planned purchase announcement itself did the trick in raising bond prices before the Fed actually bought a single one of them.Abenomics In PlayShinzo Abe and BoJ Chairman Haruhiko Kuroda assimilated the learnings from the lost quarter-century to formulate the ‘three arrows’ of Abenomics in 2013. The three arrows were:A monetary policy based on a qualitative and quantitative easing (QQE) framework with a 2 per cent inflation target, significant purchase of long-duration government securities and private risky assets, expansion of BoJ balance sheet and upfront guidance on these numbers. BoJ promised to double its monetary base to 54 per cent of the GDP by 2014. A robust fiscal policy that increases absolute government spending on areas like public infrastructure, welfare for its ageing population and servicing the debt. This was to be done in close coordination with the monetary policy actions.Structural reforms to spur growth and private investment. This includes lower corporate tax, increase in participation of women in the labour force, more immigration and acceptance of high-skilled foreign workers, more inbound tourism to Japan and championing of free trade (TTP), lower FDI barriers and global liberal order to counter China.You couldn’t fault their prescription based on what they learned from their past. Abenomics wasn’t a radically new construct but bringing the three arrows together, setting targets for them and then communicating it clearly, indicated Abe meant business. Japan needed to be jolted into a path of recovery and this was the way to do it. The salience of Abenomics grew as more economies, including US and EU, followed the path of QE to stimulate growth and manage financial stability.Did It work?Well, it is a mixed bag. The primary objective of the 3 arrows was to ‘warm up’ the economy to an extent that spurs demand and get the investment cycle going. On that count, it is a mixed bag. It has seen limited success in increasing women's labour force participation, more immigration and in keeping debt to GDP at a near-constant level of 240 per cent (pre-Covid) despite the increase in the monetary base. It’s not an unqualified success. The counterfactual, of course, can be asked. Could Japan be worse off today if not for Abenomics?I think it would.Lessons From AbenomicsSo, what are the lessons learnt from 7 years of Abenomics in Japan? Robin Harding writing for the Financial Times has six lessons from Abenomics for the world struggling with ‘Japanification’. I am paraphrasing below: Monetary policy through the massive purchase of government securities and private assets works. The ‘bazooka’ of 2013 had a positive impact on the Japanese economy – stock markets boomed, credit uptake went up and unemployment fell.Despite the promise of coordinated monetary and fiscal actions, Abe couldn’t keep fiscal hawks down. The rise in consumption tax from 5 to 8 per cent in 2014 worked counter to the efforts in increasing consumption. The economy went into a recession. Another increase last year to 10 per cent had the same impact. Communication and future guidance on targets didn’t materialise. The promised inflation target of 2 per cent was never met and the consumption tax hikes meant the premise of raising expectations and letting it do the heavy lifting in raising inflation didn’t work.Expectations management works if you meet the expectations. Beyond a point, you need to intervene directly to meet your targets. The key commitments of Abenomics were never kept and soon the market stopped responding to the BoJ plans of further easing.Stimulus doesn’t cause an increase in public debt to GDP ratio going up. We have discussed this already. It remained range-bound at 240 per cent.Structural reforms didn’t cut to the key issues confronting Japanese society – an ageing population leading to a fall in total factor productivity, a disappointed younger generation carrying the burden through levies and taxes on income, a strong hierarchical working style stymieing innovation and a reluctance to embrace large scale immigration to get out of this rut (an advantage so far for the US).Course Advertisement: Admissions for the Sept 2022 cohort of Takshashila’s Graduate Certificate in Public Policy programme are now open! Apply by 23rd July for a 10% early bird scholarship. Visit this link to apply.Global Policy Watch #3: How Social Media Expands our Reference Networks Global policy issues relevant to India— Pranay KotasthaneIn edition #173, I argued there are three meta-mechanisms that make social media a powerful instrument: reference network expansion, Overton Window Expansion, and disproportional rewards for extreme content due to information overload.This article generated an interesting conversation on social media (where else!). One of the discussion points was: what are the precise ways through which reference networks expand? Here’s an initial answer.To rewind a bit, our reference network comprises “people whose beliefs and behaviour matter for our behaviour”. Social media expands our reference networks as people worldwide can now instantly and repeatedly influence our perceptions. It’s common to misinterpret reference network expansion as echo chamber-isation. However, there’s something much deeper going on.A reference network expands when an individual associates herself with a new set of individuals. This association could be of two types: comparative and preferential. In the first type, we compare ourselves with others who we imagine to be similar to us. Social media expands the number of people who we can compare ourselves with. In the second, the focal point is our preferences. Our behaviour is determined by the likes and dislikes of others we encounter on social media.In the framework above, I have mapped these associations with likely impacts on our behaviours. It explains to a large extent how even domestic issues have global resonance, and why people are willing to support or hate people they’ve never met outside their social media apps.From this perspective, echo chambers span two kinds of preferential associations (“others like what I like”, and “others hate what I hate”). There are four other mechanisms through which reference network expansion takes place.Are there other ways you have seen reference network expansions happening on social media? Do leave a comment.HomeWorkReading and listening recommendations on public policy matters[Report] State of Discrimination Report by Bhuvana Anand and Sarvnipun Kaur analyses all the state-level legal barriers to women's employment in India. [Book] For those interested in community building, Peter Block’s Community: The Structure of Belonging has excellent insights. The portal abundantcommunity.com too has some handy resources. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit publicpolicy.substack.com

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Indications and Use of Nasopharyngeal Airway (NPA)

Pass ACLS Tip of the Day

Play Episode Listen Later May 19, 2022 4:46

The tongue is the most common airway obstruction in unconscious patients. To help keep the tongue off the back of the throat, we can use an oral or nasal airway. Nasopharyngeal airway is also called a nasal airway or NPA. NPAs are better tolerated by patients who cannot control their own airway but still have an intact gag reflex. Sizing and insertion of a nasopharyngeal airway. Clinical care and monitoring can be done with a NPA inserted. Connect with me: Website: https://passacls.com (https://passacls.com) https://twitter.com/PassACLS (@PassACLS) on Twitter https://www.linkedin.com/company/pass-acls-podcast/ (@Pass-ACLS-Podcast) on LinkedIn Good luck with your ACLS class!

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Banks could shine in Q4 earnings season

Play Episode Listen Later Apr 12, 2022 5:56

Tata Group firm TCS began the March quarter results season for Nifty50 companies yesterday. On an aggregate basis, brokerages expect the combined net profit of the companies in the 50-pack index to grow by 29% on a year-on-year basis to an all-time high of Rs 1.61 trillion, from around Rs 1.25 trillion a year ago. The combined net sales of the index companies, meanwhile, is expected to grow by 32 per cent YoY to Rs 14.18 trillion in Q4FY22 from Rs 10.76 trillion a year ago. A large part of this growth, analysts say, would be driven by the banking, finance and insurance -- or BFSI -- companies. Banks, in particular, are expected to put up an impressive Q4 show with systemic loan growth seen in double digits and asset quality staying stable. Deepak Jasani of HDFC Securities, too, says that investors need not worry about the banking sector's earnings this time. Analysts peg net interest income, pre-provision operating profit, and net profit growth for the entire sector at 19%, 6%, and 93% year-on-year. Industry credit loans, meanwhile, may swell nearly 13% year-on-year driven by growth across segments, particularly in unsecured retail, SME and housing finance segments. If one were to analyse the sector in terms of private and public banks, analysts at Kotak Institutional Equities expect the private players under their coverage to report about 21% year-on-year and 6 per cent sequential growth in net interest income. Improvement in profit after tax, meanwhile, is seen at 86% year-on-year and 6% quarter on quarter led by Bandhan Bank (up 978% year-on-year), RBL Bank (226% year-on-year), ICICI Bank (64 per cent year-on-year), and Axis Bank (51% year-on-year). Public sector banks, on the other hand, are likely to experience continued traction in their operating performances, supported by recovery in business growth, and a sustained reduction in provisions. Slippages could continue to subside, which along with healthy recoveries, would reinforce the asset quality performance. Overall, PSBs are likely to deliver net interest income growth of around 20 per cent. PAT growth is seen at 100% year-on-year and 19 per cent quarter on quarter led by Canara Bank (up 100% year-on-year), Punjab National Bank (up 98% year-on-year), and State Bank of India (up 66%). That said, while analysts believe forward flow into the delinquency bucket would likely be restricted in Q4FY22, analysts expect behaviour of ECLGS lending pool and restructured portfolio would be key to watch. In nutshell, Q4FY22 will likely be characterised by stability and normalisation after several quarters of volatility. NIMs, slippages and credit cost are likely to remain stable. Recoveries and upgrades may also outpace fresh slippages and gross NPAs could decline. On Tuesday, markets will react to TCS' Q4 results, which were announced after market hours on Monday. That apart, Anand Rathi Wealth and GM Breweries will be among the six companies set to announce their March quarter results today. Among macro triggers, the domestic Index of Industrial Production (IIP), along with Consumer Price Index (CPI) reading for both India and the US will be released later today.

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ICICI's Sandeep Bakhshi: Business Standard's 'Banker of the Year'

The Jeff Oravits Show Podcast

Play Episode Listen Later Mar 18, 2022 4:00

ICICI Bank's Managing Director and Chief Executive Officer Sandeep Bakhshi was chosen as the Business Standard Banker of the Year 2020-21 for turning around the private sector lender both in terms of performance and perception during his tenure of the past three and a half years. A jury of five members chaired by former RBI Deputy Governor SS Mundra unanimously chose the 61-year-old as the winner. Bakhshi took charge of India's second-largest private sector lender in October 2018 amid controversy surrounding his predecessor Chanda Kochhar, who had to step down over corporate governance issues. Only 10 banks qualified under the criteria used to select the contenders. The jury took into account matters such as governance, recent events, HR practices, the regulatory stance, innovative practices, and technology prowess to arrive at a conclusion. When the choice finally came down to two large banks which had registered strong performance under both the leaders, what clinched the decision in favour of Bakhshi was turning around the bank after inheriting a difficult legacy. “He inherited a difficult legacy but steadied the ship over the course of the last few years with a mature leadership as against the other contender who took over a stable organisation during the year. The bank showed an improving trend on most of the parameters over the past three years. This is against almost a status quo in the other case,” says jury chair SS Mundra. Jury chair SS Mundra said Bakhshi steadied the ship over the course of the last few years with a mature leadership while the bank improved on most of the parameters. Bakhshi is credited with reviving the organisational morale also and bringing in collaborative management leadership, the jury members concurred. The bank rewarded 80,000 frontline employees with an 8% pay hike during the Covid-19 pandemic year. One of the jury members highlighted that the turnaround under Bakhshi was not just in the banking business, but also in the subsidiaries. The banker has been with ICICI Group since 1986 and handled assignments across the group in ICICI, ICICI Lombard General Insurance, ICICI Bank, and ICICI Prudential Life Insurance. He received a two-year extension last year, until October 2023. The media-shy business leader, who prefers to keep a low profile, accepted Business Standard's award but declined to comment further. Its gross and net NPAs and bad loan ratios have consistently declined in the last four years while return on assets has almost doubled. (VO 10 to go with graphic and chart above) ICICI Bank is well capitalised, has strong ratios, adequate provisioning, and low bad loan ratios. For 2020-21, ICICI Bank reported a net profit of Rs 16,193 crore, against Rs 7,931 crore in the preceding financial year. Its loan portfolio grew 13.7% year-on-year to Rs 7.34 trillion, while deposits went up by 21% year-on-year to Rs 9.33 trillion. ICICI Bank shares are up 130% in Bakhshi's tenure so far. Under Bakhshi, the bank is guided by two principles. The ‘One Bank, One RoE' principle emphasises the need to maximise the bank's share of profitable growth opportunities across all products and services. Whereas, The ‘Fair to Customer, Fair to Bank' principle emphasises the need to deliver fair value to customers while creating value for shareholders On the product side, feedback was given priority over targets, which meant that certain products were withdrawn because, while they were good for the bank, they not have been so for clients. ICICI Bank increased its presence rapidly in the credit card segment too. Co-branding and new launches have boosted credit card sales. Its co-branded card with Amazon Pay has been a huge success in the market. The bank believes leveraging digital technology is core to its business. Its iMobile Pay app is a testimony to the bank's execution in this area. The app has seen 5.3 million activations from non-IC

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NAZ jail stops taking non-violent offenders, Governor Ducey claims his $14.25billion budget is fiscally responsible, breaking down campaign dollars in AZ gov. race.

Play Episode Listen Later Jan 19, 2022 74:10

#1283 Tuesday, January 18, 2022 NAZ jail stops taking non-violent offenders, Governor Ducey claims his $14.25billion budget is fiscally responsible, breaking down campaign dollars in AZ gov. race. 0:00-17:14 Arizona News Roundup: Jeff breaks down some big Arizona News items including a NAZ jail stops taking non-violent offenders, AZ Senator Kelly Townsend running for CD6, Treasurer Yee out of governors race, CRT ban progressing at AZ Legislature and Governor Ducey's wealth transfer plan caps off a fiscally irresponsible bloated budget. 17:15-29:56 Covid Update: Jeff discusses Israels admission that they “made mistakes”, especially with the vaccine “Green Pass” which will soon be phased out and that the booster shots are doing little to impact Omicron. Hawaii apparently didn't get the memo requiring unvaccinated to quarantine. 29:57-43:27 Shortages, masks and campaign dollars: Jeff shares shortages in Arizona. Share your pics/stories of shortages by emailing talkwithjeff@icloud.com. Supreme Court will not hear case asking to repeal mask mandates on planes. 24 running for Governor in Arizona, Jeff shares how much money the front runners have. 43:28-59:06 Spending more but fiscally responsible & Covid apologies: Finally! Some politicians apologizing for their Covid missteps! Just not too many. Can we get our two years back? Ducey claims he's fiscally responsible yet the numbers show he's the biggest spending Governor. 59:07-74:10 Eating crocodile and listener comments: Jeff and Olivia answer some listener comments including Pete asking why Jeff's daughter is still at NAU, shock over NPAs vaccination controversy and more.

Market wrap: Sensex, Nifty end flat; BSE IT index hits all-time high

nfl kidding adam neumann effing npas

Play Episode Listen Later Dec 30, 2021 4:12

Top headlines · Sensex, Nifty end flat; Reliance, Tata Steel decline · BSE IT index hits all-time high, up 10% in December · NTPC gains 3% on plans to sell stake in newly formed renewable energy arm · Delta Corp slips 5% as Goa govt caps casino entry at 50% · RBI clears Rajeev Ahuja's appointment as RBL Bank's interim MD & CEO The key benchmark indices witnessed yet another range-bound trading session as investors preferred to stay on the sidelines amid year-end celebratory mood. The BSE Sensex opened 50-odd points lower at 57,755 but soon rebounded into the positive zone and touched a high of 58,010. The index finally settled with a nominal loss of 12 points at 57,794. The NSE Nifty closed 10 points lower at 17,204. Among the 30 Sensex constituents, NTPC surged over 3% after the company announced its plan to hive off up to 50 per cent stake in its newly formed renewable energy arm in the next financial year. IndusInd Bank, Dr Reddy's and Titan were the other prominent gainers. On the flip side, Reliance Industries was a major laggard. The stock slipped nearly 2% and alone accounted for a loss of 120 points for the BSE benchmark. The broader indices finished on a mixed note. The BSE Midcap declined 0.2 %, and the Smallcap index rose 0.3 %. Sectorally, IT counters saw the biggest action. Shares across midcaps and large caps rallied on hopes of strong December quarter earnings. The BSE IT index hit a new all-time high of 38,028 and closed 1% higher. In its earnings preview for the IT sector, IDBI Capital expects demand outlook for all companies to remain robust for both December quarter and FY22. They expect midcaps to outperform large caps. Similarly, being another defensive sector, pharma also showed strong momentum in an otherwise dull market and helped frontline indices recover from their morning losses. On the other hand, banking stocks, especially PSUs, were under pressure as the RBI's financial stability report suggested that banks might see a surge in bad loans with NPAs rising from 6.9% in September 2021 to 8.1% in September 2022 under the base-case scenario. Among individual stocks, Delta Corp ended nearly 5% lower on the BSE following reports that the Goa government had imposed fresh restrictions on occupancy rate at entertainment parks, including casinos, in the wake of the Omicron threat. And lastly, the Reserve Bank of India approved the appointment of Rajeev Ahuja as interim Managing Director and Chief Executive Officer of RBL Bank for up to three months. He had been appointed to this position on December 25 after the bank's former MD & CEO Vishwavir Ahuja had gone on a medical leave. RBL has denied media reports suggesting that a Rs 300-crore write-off by the bank in the loan account led to the central bank's intervention. The stock of the private bank today fell 10% on the BSE.

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November 10, 2021 the Are You Effing Kidding Me edition

Daily Compliance News

Play Episode Listen Later Nov 10, 2021 7:17

In today's edition of Daily Compliance News: · Adam Neumann is still Adam Neumann. (NYT) · Librarian files request for NPAs. (Reuters) · Congress wants NFL emails. (WSJ) · BoJo integrity questioned. (Reuters) Learn more about your ad choices. Visit megaphone.fm/adchoices

More on DAG Monaco Speech-DPAs and NPAs

Compliance into the Weeds

Play Episode Listen Later Nov 3, 2021 23:09

Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. Today, Matt and Tom continue their look at the recent speech by DAG Lisa Monaco to the ABA White Collar Institute on some very significant change to white collar, including FCPA enforcement. Today we consider potential changes to DPAs and NPAs and other settlement mechanisms. Some of the issues we consider are: · Are DPAs and NPAs simply the cost of doing business? · Is the Wells Fargo growth cap a valid model? · What about greater DOJ or Monitor oversight? · Longer terms for DPAs? · New enforcement tools coming? · New review of DPAs and NPAs. Resources Matt in Radical Compliance So What Happens Next with DPAs Tom in the FCPA Compliance and Ethics Blog Monaco Speech - Individual Accountability Monaco Speech - Monitors Text of DAG Monaco Speech Learn more about your ad choices. Visit megaphone.fm/adchoices

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New rules enough to protect genuine business decisions of bankers?

covid-19 public protect genuine new rules bankers rs rbi business decisions iba cvc psb watch video choudhury cag fy20 jaisalmer npas finance minister nirmala sitharaman

Play Episode Listen Later Nov 2, 2021 3:25

The Rajasthan Police on Sunday arrested former SBI Chairman Pratip Chaudhury in a case of alleged loan fraud involving a private hotel in Jaisalmer. The case relates to properties owned by Godawan Group, which failed to repay the bank Rs 24 crore loan taken for the construction of a hotel in 2008, when Chaudhury was the chairman. The bank had then seized the borrower's hotels, worth Rs 200 crore, and sold them for Rs 24 crore. The hotels were then sold to Alchemist Asset Reconstruction Company (ARC) for Rs 25 crore in 2016. This was legally challenged by the Godawan Group. Later, after retirement, Choudhury joined Alchemist ARC as a director. While this is a case of alleged fraud, the government has also come up with new guidelines that aim to protect the legitimate commercial decisions of bankers. Public-sector banks have been asked to implement common staff accountability policies for loan accounts of up to Rs 50 crore that turn into non-performing assets (NPAs) from April 1, 2022. These new rules do not apply to fraud accounts. Further, depending on the business size of the banks, threshold limits have been advised for scrutiny of accountability by the Chief Vigilance Officer. At present, different state-run banks follow different procedures for conducting staff accountability exercises. Under the new framework, public-sector banks must complete the staff accountability exercise within six months from the date of classification of an account as bad loan. The past record of the employees will also be considered during the scrutiny. The Indian Banks' Association (IBA) has welcomed the move, calling it a morale booster for employees. IBA has added that slow credit delivery to industries due to the fear of implication is a cause for concern, at a time when the country is in need of an economic boost. The credit growth of banks in India moderated to 5% in the FY21 from 6.8% in FY20 due to adverse effects of severe economic disruptions caused by the Covid-19 pandemic. While punitive action needed to be taken against the oﬃcers having malaﬁde intent, it was essential to ensure that bonaﬁde mistakes were dealt with compassion, the association said. Two years ago, Finance Minister Nirmala Sitharaman had said that the fear of 3Cs – CBI, CVC and CAG – was affecting the decision-making of banks. Though all of these may seem well and good, a structural change in regulation is required for better supervision of banks. All commercial banks in India are regulated by the RBI under the Banking Regulation Act of 1949. Additionally, all public sector banks are regulated by the government under various legislation. The RBI's legal powers to supervise and regulate state-run banks are constrained by Section 51 of the Banking Regulation Act. It cannot remove PSB directors or management, who are appointed by the government, nor can it force a merger or trigger the liquidation of a PSB. It has no powers to either supersede the boards of state-run banks or revoke their banking licence. It has also limited legal authority to hold PSB boards accountable over strategic direction, risk profiles, assessment of management, and compensation. The government should take steps to remove this dual regulation for commercial banks as this problem may lead to banking system frauds. The RBI must be empowered to fully supervise all aspects of public-sector banks, including their corporate governance. For now, let us hope the new rules on staff accountability boost the confidence of bankers. Watch Video

DAG Announces Changes in Enforcement Priorities

Compliance into the Weeds

Play Episode Listen Later Oct 29, 2021 27:08

Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. Today, Matt and Tom have a rare emergency podcast on DAG Lisa Monaco's speech to the ABA White Collar Institute on some very significant change to white collar, including FCPA enforcement. Some of the issues we consider are: Return to the Yates Memo. Disavowal of the Benczkowski Memo. Change in the FCPA Corporate Enforcement Policy? Whither recidivists? New enforcement tools coming? New review of DPAs and NPAs? Resources Matt in Radical Compliance, Justice Dept. Unveils Big Compliance Shifts Text of DAG Monaco Speec Learn more about your ad choices. Visit megaphone.fm/adchoices

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What does RBI ex-Guv Subbarao think of India's $5-trn economy goal?

Play Episode Listen Later Oct 7, 2021 10:28

After a 7% economic contraction in 2020-21 financial year, India is eyeing over 9% growth in FY22. However, with extreme job losses, migration of labour from high-productive to low-productive jobs, and high inflation, policy makers may have to rethink the target of a $5-trillion economy by 2025. In an interview with Nikita Vashisht, former Reserve Bank Governor D Subbarao explained why doubling the economy in 4 years might be too ambitious. Highlights of the Q&A: What's the state of the economy as we are coming out of the second Covid wave? • Economy contracted by 7.3% last year, estimated to grow 9.5-10% in FY22 • V-shaped recovery only in technical sense • Growth lower than what it would have been if there was no pandemic • Income loss is distressing, especially in a country like India • Pandemic has left (economic) scars; need to be sensitive about them How do we bridge the inequality gap? • Need to generate employment • Labour shifting from manufacturing to low-productivity agri sector • The reverse should have been happening Will 'Atmanirbhar' package be enough? • Atmanirbhar package a wide canvas • But it's not a solution to the employment problem • Employment issue worsening; need to enhance skills The private sector won't invest in capex till there is demand. As incomes getting squeezed and disposal income of people is lower, their spending power will be curtailed. How do we get out of this conundrum? • Export demand can trigger investment demand • Domestic consumption demand will follow • Investment demand can hopefully pick up next year Would you have dealt with the economic situation differently during the pandemic if you were at the helm of the RBI? • Not really, RBI has done a great job based on the advice received • The challenge now is to exit the expansionary policy in a non-disruptive way Any way by which we can start exiting this expansionary policy? • Expectation of liquidity withdrawal, and increase in reverse repo • Need to keep the markets informed Are NPA troubles behind us now? • The worst seems to be over • Large corporates are mostly deleveraged; banks' fundraising is better • Not creating NPAs at the same pace as earlier Do you foresee any operational challenges for the 'bad bank'? • No prior experience • Key challenges: Price agreement, bidders back out, security receipts dishonoured, existing promoters trying to get back in the game • Approach issues with an open mind Do you see any challenges in the Rs 6-trillion asset monetisation plan? • Challenges will be there, but should still chase this aggressively • Worry points: Bidding process transparency, dispute resolution, clear performance parameters, contract flexibility Can India achieve the target of becoming $5-trillion economy by 2024-25? • 2025 looks difficult • Targets need to be challenging but realisable. Watch Video

NARCL: Another brick in the wall; not too different from other ARCs

Play Episode Listen Later Sep 16, 2021 1:30

National Asset Reconstruction Company Limited (NARCL) is another attempt being made to resolve the NPA issue. DRTs, Lok Adalats, ARCs and IBC have all been routes chosen by the government in the past to take on the bad loans of banks so that they could concentrate on banking rather than resolving bad loans. The idea is good to have a bad bank, even though the future is uncertain as the asset reconstruction companies have not had a great time on the street. IBC too has witnessed diminishing returns literally with the recovery rate coming down as the issue gets complex with delays in resolution. How is NARCL different? Two things stand out. First, it is being set up by public sector banks, which makes a difference insofar as banks will be willing to sell their assets in return for cash/securities. Earlier, the challenge was on the pricing where the company would talk of deep haircuts which the bank was not willing for. Now, with the transaction being through banks there would be more willingness to come forward. The guarantee will ensure that at the time of liquidation or resolution, the difference between the value at this point of time and the security value will be made good by the government. The second is that the government is playing a role here by giving a guarantee to the securities that are being issued by NARCL when it takes over the bad loans. The present formula will be 15% in cash and 85% through securities that are guaranteed by the government. There is talk of Rs 2 trillion of NPAs being addressed through this route with the guarantee being Rs 30,600 crore to begin with. What the government has outlined is the structure of the new organisation. But is it different from the other ARCs? The answer is not really, as conceptually they will do the same job and look to resolving the bad assets. The initial assets bought by NARCL will be those that have been fully provided for, which is good for its working as this is an experiment on an existing model and the success will finally be dependent on how much is the recovery. IBC has had superior results compared with ARCs and DRTs and one can be skeptical on whether the realisation will be very different. Time will tell. But having several routes for NPA resolution has both advantages and disadvantages as the decision will finally be taken by the banks. The positive part is that having alternative systems widens the scope for resolution given the volume of NPAs that is outstanding. The disadvantage is that this can lead to a situation where banks can arbitrage between NARCL and IBC. IBC is more time bound and hence may look stricter while NARCL is still a concept and would tend to be more flexible. There could also be pressure put by the defaulting company to avoid going to the IBC and using the NARCL route and this may be acceptable because to begin with one would not know how successful this institution in terms of recovery would be. Further having more options (even though NARCL is still to be tested) may just lead to dilution of credit standards just at the time when the system is getting out of the morass of NPAs. This is a pitfall which should be avoided at all costs. Madan Sabnavis is chief economist at CARE Ratings and author of Hits and Misses: The Indian Banking Story. Views are personal

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#142 The Games We Play 🎧

Play Episode Listen Later Sep 5, 2021 27:04

Matsyanyaaya: Not So Great Game Theory in AfghanistanBig fish eating small fish = Foreign Policy in action— Guest Post by Ameya NaikUS intelligence agencies considered it likely that the Taliban would retake control of all or most of Afghanistan following US withdrawal. Their estimate, however, was that this would take weeks or even months; the idea that Kabul would fall in a matter of days was considered a worst-case scenario. Now that the worst case has played out, analysts are scrambling to explain why. One narrative thus has it that ANA was so poorly-trained - and its leadership so corrupt - that once U.S. military contractors left the field, Afghan forces had neither the motivation nor the acumen to resist the Taliban advance. As President Biden himself put it "...we could not provide them... the will to fight."To test that claim, we can turn to Game Theory.Game Theory stylises any decision involving two or more players as a "game". Each player can receive some "payoff" (or outcome) from the game. Payoffs are "contingent", i.e. the payoff a player receives depends partly on their own decisions, partly on the decisions of the other player or players. One assumes players will act rationally, making choices that maximise their payoffs. Thus, if we know the payoffs each player can receive, we can predict their choices, and thereby also the outcome of the game.The most famous example of this is the Prisoner’s Dilemma: a game in which two people suspected of committing a crime are being questioned independently. If both deny committing any crime, the authorities will only be able to convict them of a minor offence (slightly bad outcome). However, if one of them bears witness against the other, the authority will let the snitch go free (best outcome) while convicting the other of a major offence (worst outcome). The textbook prediction is that both suspects will crack, and wind up with the worst combination of outcomes. However, the classical Prisoner's Dilemma is limited in one important way: it is a single-turn game. The players only make a choice once, at the same time, without knowledge of each others' choices - and then the game ends. A more realistic scenario is what is known as a repeated game. A repeated game has multiple turns: the same players interact, under the same rules, with knowledge of the choice made by the other players in the previous turn. Imagine that the suspects are schoolchildren and the authority is the Principal of the school. No one is going to jail; even if neither child knows what the other is saying to the Principal, they do know they will both interact on multiple occasions thereafter, both in class and outside it. Even with the same payoff structure, the outcome starts to look different: knowing that we have to meet the other person every day makes us far less likely to crack - or "defect", in game theory jargon - because they could punish our defection on the next turn. In a repeated game, players make decisions "in the shadow of the future".The political scientist Robert Axelrod modelled a repeated game in The Evolution of Cooperation. He demonstrates that the optimal strategy for such games is what he calls "Nice Tit-for-Tat".Start by complying (being nice to the other player)If they comply, continue complying (happily ever after)If they defect, punish them by defecting on your next turn.If they respond to your defection by complying, they have accepted the punishment, so go back to complying again.If they defect again, you should also defect again (Tit-for-Tat) - a downward spiral until and unless they switch to complying.A key insight from Axelrod's work is that this strategy only works if the total number of turns is unknown. Why? If the number of turns is known, we can try to pull a fast one - complying until the penultimate turn, but then defecting on the very last one (turn N), when there is no possibility of punishment thereafter.The other player is not a fool. They know we are likely to defect on the final turn, so they will take precautions: they will defect preemptively, on the penultimate turn (N-1). Since we know they will do this, we will defect on the turn before that (N-2). They know we will do this, so they will defect on the turn before that one (N-3) - and so on till the whole chain unravels.The deterrence of future punishment only works if the number of turns is unknown. We can think of this as an infinite game or at least an indefinite one.What does all this have to do with Afghanistan? When President Trump committed to pulling out U.S. troops by a specific date, and then when President Biden made clear he would uphold that commitment (even with a different date), they converted an infinite game into a finite one. An open-ended U.S. presence was a signal of potentially unending US involvement, complete with punishment for behaviour the US considered unacceptable - for instance, overthrowing the US-supported government in Kabul.Afghan leaders broadly shared the assessment of the U.S. intelligence agencies: the Afghan government could not survive if US support was withdrawn. (Whether this is objectively true is beside the point; it seems to have been the mental model of the Afghan provincial governors, military leaders, and in all likelihood Afghan soldiers themselves.) With withdrawal confirmed, why bother resisting - especially given the Taliban's inhuman tactics, including targeting family members of soldiers, and threatening reprisal killings once they take power?Once the average Afghan believed that a Taliban victory was inevitable, the finite game unravelled. Players chose to defect (surrender / retreat / literally defect to the Taliban) at every step, and the timeline towards the fall of Kabul accelerated dramatically.Biden is precisely wrong. The US was providing Afghan leaders and forces with the will to fight, not by training and equipping them, but by making the prospect of a Taliban victory impossible. Given U.S. domestic sentiment favoured withdrawal, a better question might have been: even without a U.S. military presence on the ground, could the US establish deterrence against the Taliban?India Policy Watch #1: NMP, Another Gamechanger? Insights on burning policy issues in India— RSJThe Union government this week announced a National Monetisation Pipeline (NMP) with the aim to unlock value in existing infrastructure projects. The idea is simple and draws from the pioneering “Asset Recycling Initiative” done in Australia between 2013-16. Select assets that are already generating revenues (like roads, railway stations, power plants), lease them out to private sector bidders for a defined period, transfer the revenue rights to them, take an upfront payment for the lease, work out some revenue share arrangement on an ongoing basis, and have a few checks and balances to ensure the private sector doesn’t gouge the consumers on pricing or runs the asset to the ground over the years. That’s it. The government expects to raise ₹6 lakh crores in the next four years from this which it will use to fund greenfield infrastructure projects. To make sense of this number, the Union budget size this year was around ₹35 lakh crores. In the speech, the FM had reiterated the intent to spend ₹110 lakh crores over the next 4 years to create a National Infrastructure Pipeline. About 85% of that amount was to be raised through the traditional sources of capital (government borrowings) and the balance was to be taken up through innovative mechanisms. One such mechanism was the creation of a new Development Finance Institution (DFI) which would build a lending portfolio of ₹5 lakh crores in three years. The other mechanism is the NMP announced this week. So, what do I think of this? Let’s look at the reasons for doing this. Our economic engine was slowing down even before the pandemic. Things have gotten worse since. The government can manage to keep its base in thrall with its favourite social and cultural issues for a while but the hard economic realities will eventually bite. This is true even for this government regardless of their narrative building skills. We have a yawning infrastructure deficit in the country. It is a prerequisite for growth. Investment in infrastructure has a tremendous multiplier effect and it has the potential to generate new jobs. The government has to take the lead in starting the Capex cycle. The private sector has burnt its fingers in the last decade and huge NPAs in the banking system are proof of it. The private sector, for all its vociferous support to all government initiatives, has barely contributed to the gross capital formation in the last decade. The interest rates globally are at an all-time low and there’s a capital glut everywhere. China is no longer a safe option with its crackdown on private capital. There’s no better time for India to raise capital. The government has limited fiscal space given the impact of the pandemic on its revenues. It is looking for ways to raise funds without widening the deficit further. India isn’t considered a great destination for launching greenfield projects. The state is capricious and the ease of doing business isn’t great. So, the best option is to offer brownfield projects for monetisation. They are less risky because they are already ‘live’ and, possibly under-utilised. The idea is to have the private sector come in with better quality resources and efficiencies to generate an incremental return over what these projects were already doing. The government receives its ‘fair share’ and the private sector ‘sweats’ the asset more efficiently to make its returns. Win-win for all. An outright sale of these assets is out of the question. It will be politically untenable even within the BJP. A long term lease might be as good as a sale considering many of these assets won’t have that kind of a lifetime. But lease sounds politically more palatable than sale in a country that’s reflexively socialist. It is difficult to argue with the rationale above. This is not one of those instances in public policy where everyone is clamouring let’s do something; this looks like something; so, let’s do this. The solution arrived at fits the problem statement. That is not a bad start when you look at the history of ‘gamechanger’ moves of this government. But the usual arguments against it have been made in the past few days. Let me run through them: “We are handing over our core national assets to the private sector or foreigners.” This is quite bizarre. This is a lease and the state, like we have repeated many times over, holds unbelievable powers in India to change the rules of the game midway. In fact, this is one of the reasons why we might have few takers for this programme. The history of raising the foreigner or private sector bogey has done us no good over the years. But this never goes out of fashion. “This will lead to the monopoly of two industrial houses who are already entrenched in this ecosystem.” There is a real danger of this happening. It is likely that we won’t have too many bidders for these assets or the game is rigged to favour a few industrial houses. The nature of assets being monetised is such that monopolies are natural in them. You have only one 4 lane road to take between two cities, for instance. So, a couple of companies controlling many of these assets could mean exploitative pricing. My counter to this is a bit cynical. We have a problem with monopolies in many sectors regardless of NMP. This has to be countered through anti-trust laws, debates in parliament, litigation and public awareness. Scuppering NMP won’t change this truth. In fact, a well designed, transparent NMP auction process might allow better funded and more credible options to emerge. That should be the focus here. “This is well-intentioned but implementation will be key.” This is true for everything. Of course, we will need to have more specific details of the assets and their current revenue streams, we will need to provide clarity on how regulatory actions in future don’t impact the financial projections of these assets, we will need safeguards on maintenance and development of these assets when they are under lease and on future pricing of the consumers. The track record of this government isn’t great on implementation after making a big announcement. But that doesn’t mean there should be no attempt to do anything new. My hope is they learn from the past and put a plan that works. “There should have been consultations and debates in parliament on this.” This is a necessary condition for any initiative of this kind. The private sector bidders are looking for stability in their revenue stream for a long duration (25 years or more). They will be reassured if they were to see a broader consensus across the political spectrum on this. The ability of the state governments led by those in opposition to throw legal or regulatory spanners in the works in the future shouldn’t be underestimated. The Union government would have made it easier for everyone by at least making an effort to have a discussion with the states and other political parties. But that ship has unfortunately sailed a long time back. This isn’t a government that believes in such niceties and any attempt to start now isn’t going to take it anywhere. This is the great tragedy of our current times. We cannot agree on a good idea in good faith. The Union government holds the can on this one. The pessimist in me expects this ‘big idea’ to follow the same course as other such ideas of this government in the past. Demonetisation, GST, Make In India, Aatmanirbhar Bharat etc. We will have sporadic successes and we will soon forget it and get started on another new thing. That will be a pity. Because we really need a multi-year Capex cycle to get going for our future.India Policy Watch #2: Shivshankar Menon on India And Asian Geopolitics Insights on burning policy issues in India— RSJWhat should be the primary objective of India’s foreign policy? I often ask this question to people who are well-read and have a view on world affairs and India’s place in it. The answers often disappoint me. This isn’t because they are wrong. I mean who can say what’s the right answer for such questions. It is because they don’t give an answer that I think is right. Heh! So, imagine my happiness in reading a book where the author and I are on the same page on this vital question. That the author happens to have been a Foreign Secretary and a National Security Advisor of India in the past makes this the newsletter equivalent of “chhota munh, badi baat” on my part. Anyway, I had written a couple of weeks on The Long Game by Vijay Gokhale and I had mentioned in passing about Shivshankar Menon’s India And Asian Geopolitics: The Past, Present. Menon’s book is a broader analysis of India’s choices in a century where Asia will play a bigger role in the world with the inevitable rise of China. It is a deeply insightful and richly argued book. Menon is an old school liberal with a keen intellect, a comprehensive understanding of geopolitics and a believer in the values on which the modern Indian state was founded. I have taken a few extracts from his book where he discusses the central objective that should guide India’s policy towards the world. To begin with – what should be the task of our foreign and security policy apparatus and how have we seen ourselves in the global order? Menon writes: “Since Indian independence, the primary function of Indian policy has been the great national task of transforming India into a prosperous, strong, and modern country. The task of the foreign and security policy apparatus is to identify, deter, and defeat threats to national security that could prevent that transformation and to create an enabling environment for India’s transformation. This will remain the nation’s purpose for a long time to come, so long as India has poor, illiterate people who live insecure lives threatened by disease and who cannot fulfil their potential. Why should many Indians live in what Juvenal called ‘a state of ambitious poverty’ which affects all Indian in so many ways? Until recently India has a vision of both its place in the world and of the order it preferred. That was of an order that was rule-based, democratic, and plural, that would assist in the transformation of India. To this end, India saw itself as a responsible stakeholder in the international system, was a willing contributor to international peacekeeping and to solidarity among developing countries, and was an active participant in the multilateral order. India was one of the greatest beneficiaries of globalisation decades.” Menon is no fan of our newfound desire to be a ‘’vishwaguru”. This isn’t because he doesn’t believe in our civilisational values. It is just that he is a realist. No ‘soft power’ of this nebulous kind is going to help us with our objectives. He argues: “For the last few years, however, India seems adrift in terms of a vision of India’s role and place in the world. There has been an obsession with India as “a leading power” and its standing in the international order. Spokespersons for the Modi government have spoken of statecraft as “a battle of civilisations, battle of cultures, basically the battle of minds.” They have also concentrated on India’s civilisational glory and spoke of regaining it, PM Modi has spoken since 2015 of India as a vishwaguru, or world teacher. The idea of vishwaguru probably plays well with Modi’s core Hindu constituency at home but is hardly a realistic goal when contemporary India is a net importer of knowledge, is not known for innovation, and must still do a great deal to spread primary education to its people and raise educational standards to acceptable levels in its institutions of learning. Nor is it clear how vishwaguru status would address the immediate problem of livelihood and security that the Indian people and nation face. Becoming a vishwaguru is hardly the answer to India’s security, economy, and development needs and what they require from the international system. In any case, the first Modi government saw precious little done to move India towards this nebulous goal, which may be just as well. India is and has been an important player on the world stage with its own interest and will continue to be so. And yet, the purpose of our participation in the international community is not to see how many people we can outdo or push down. It is to uplift our own people and to improve their condition…” And lastly, Menon might be among the last of the dying breed of Nehruvian but he is objective about Nehru’s foreign policy lapses: “The narrative about India as a great power seems driven more by a desire for status and recognition than by the outcomes the quest for great-power status is likely to produce for the Indian people, society, state, the subcontinent, and the world. What is missing is a vision of India’s place in the international system and its goals, as Nehru was able to articulate in his time, even though he was not always entirely in touch with the realities of power and therefore saw some of his policies fail.” The book is a wonderful history of our foreign policy written with insight and passion. You might occasionally disagree with his views but, in the end, you are left in no doubt this is a book written by a man who feels deeply for India. India Policy Watch #3: Today’s EhrlichiansInsights on burning policy issues in India— Pranay KotashaneWe consistently write here on why the oft-repeated narrative that India’s population is the root cause of its ills, is problematic. This week, I came across an excerpt in Jason Crawford’s delightful MIT Tech Review article discussing this narrative. He writes:The 1968 book The Population Bomb, by Paul and Anne Ehrlich, opened with a call for surrender: “The battle to feed all of humanity is over. In the 1970s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate.” In 1970, Paul Ehrlich reinforced the defeatism, saying that in a few years “further efforts will be futile” and “you may as well look after yourself and your friends and enjoy what little time you have left.” Because they saw the situation as hopeless, the Ehrlichs supported a proposal to cut off aid to countries such as India that were seen as not doing enough to limit population growth.This book went on to be a hit in the 1970s. The population alarm it amplified eventually led to the Indira Gandhi government’s draconic sterilisation programmes and China’s one-child policy. Though Ehrlich’s alarmist prediction was falsified, the fear-mongering continues to resonate even today in our policy discourse. Today’s Ehrlichians argue, without batting an eyelid, that states having relatively higher population growth rates should be penalised financially and electorally. Financially, by making the Finance Commission transfers contingent on their population growth rates, just like Ehrlich argued for cutting off aid to India. And electorally, by stalling delimitation of constituencies. Now, there are perfectly good reasons for making Finance Commission grants contingent on the states’ governance record. Similarly, there is a debate to be held whether another round of electoral delimitation might be of any use when our parliamentarians are shackled by the anti-defection law. And yet, it’s the Ehrlichian argument that often gets deployed. At a philosophical level, by making “We, the people” itself a problem, it provides the Indian state with a ready excuse for its underperformance. At a factual level, it ignores that India’s population growth rates across states are on a decline. All states are at different points of the same journey. We should shun these Ehrlichian notions. They became irrelevant a long time ago. PS: It turns out that linking fiscal transfers to population control was also an Emergency creation. The National Population Policy of 1976, among other things, made 8% of the Union government’s assistance to state plans contingent on their performance in family planning. A Framework a Week: Public Policy SolutionismTools for thinking public policy— Pranay KotasthaneThis week, instead of a framework I have a desirable “frame of mind” for participating in Indian public policy discourse. The inspiration comes from the same essay by Jasan Crawford I quoted above. Titled Why I’m a Proud Solutionist, the essay says:“To embrace both the reality of problems and the possibility of overcoming them, we should be fundamentally neither optimists nor pessimists, but solutionists.”..The term “solutionism,” usually in the form of “technocratic solutionism,” has been used since the 1960s to mean the belief that every problem can be fixed with technology. This is wrong, and so “solutionism” has been a term of derision. But if we discard any assumptions about the form that solutions must take, we can reclaim it to mean simply the belief that problems are real, but solvable...Solutionists may seem like optimists because solutionism is fundamentally positive. It advocates vigorously advancing against problems, neither retreating nor surrendering. But it is as far from a Panglossian, “all is for the best” optimism as it is from a fatalistic, doomsday pessimism. It is a third way that avoids both complacency and defeatism, and we should wear the term with pride.”Wise words, these. Given the daunting challenges that India faces, it is easy to fall into the traps of visceral pessimism or unreal optimism. Or to end with sterile conclusions such as problems are complex, “we don’t have enough data”, or “there’s a long historical chain that explains our current problems”. Academics might deride solutionism for its attempt to solve something layered and complicated, libertarians might mistake this mindset for centralisation, and bureaucrats might hate it because some solutions go beyond incrementalism.Each of these criticisms has some merit but the public policy mindset must attempt to learn from them instead of discarding solutionism. Without this mindset, confronting tough trade-offs inherent in every policy alternative becomes impossible; every problem comes across as a wicked one. Moreover, it is easy to find PolicyWTFs — there is no shortage in the Indian context. But a solutionist frame of mind can help us reflect on policy successes instead of limiting ourselves to lampooning policy failures. Finally, a solutionist mindset makes for better stories. Given how stories are so central to human existence, it is important to give chance to the idea that even intractable problems — such as climate change — can be solved. It’s only this belief that can ward off cynicism. HomeWorkReading and listening recommendations on public policy matters[Paper] A well-written review of India’s population control policies by Gabe T Wang[Article] A Smithsonian piece by Charles Mann on the book that incited a worldwide fear of overpopulation[Article] John Lloyd in Quillete on a brand of anti-racism in the UK that’s endangering individual liberty. [Article] Andy Mukherjee writing in The Print on Asset Monetisation: What is the best asset monetisation plan? Modi govt can learn important lessons from Australia Get on the email list at publicpolicy.substack.com

Market Ahead Podcast, Aug 23: Factors that could guide markets this week

Yadnya Investment Academy

Play Episode Listen Later Aug 23, 2021 3:30

In the absence of any major domestic triggers, the equity market sentiment this week will be guided by the global trends. Volatility is likely to remain high amid rising global Covid cases and monthly F&O expiry. In the week gone by, the indices had declined in two of four trading days amid fears of a sooner-than-expected tapering in monetary stimulus by the US Federal Reserve, rising cases of the Delta variant of the coronavirus coupled with China's regulatory crackdown. On the global front, investors' eyes will also be on US Federal Reserve Chair Jerome Powell's address at the Jackson Hole Symposium as concerns over tapering intensified especially after the recent Federal Open Market Committee minutes. Further, three companies are up for listing this week. Nuvoco Vistas will list on exchanges on August 23 while Aptus Value and Chemplast Sanmar will debut on August 24. All three IPOs had received a tepid investor response. Moreover, a tepid start for CarTrade signals an impact on the listing of these firms. With the earnings season over, markets would track movement in rupee, Brent crude and foreign fund inflows to derive further cues, analysts said. And now, let's take a look at the trade setup for today. After two days of selling pressure, markets are likely to gain their mojo back, tracking an upbeat global sentiment. At 7.30 am, SGX Nifty was up 160 points at 16,565, indicating a gap-up start for the benchmark indices. Globally, Asian stocks rose as traders sought to take advantage of last week's selloff while weighing risks from the delta virus strain and China's regulatory curbs. Japan's Nikkei was up 1.6 per cent, Australia's S&P/ASX 200 index added 0.3 per cent and South Korea's Kospi rose 1.43 per cent. US equity futures also traded marginally higher. On the stock-specific front, shares of Adani Group companies are likely to be in focus after the market regulator Sebi kept the proposed Rs 4,500-crore initial share-sale of edible oil major Adani Wilmar in "abeyance". The company had filed preliminary papers with Sebi on August 3, to raise funds through an initial public offering (IPO). Aurobindo Pharma said its Rs 420-crore deal to acquire 51 per cent stake in Cronus Pharma Specialities India or Cronus has been cancelled. On August 12, the company had announced that it had entered into definitive agreements to subscribe to fresh equity shares in Hyderabad-based Cronus. Karnataka Bank plans to raise up to Rs 6,000 crore debt capital during the current financial year, and it will seek shareholders' approval in the ensuing AGM next month. Troubled with huge NPAs and top-level exits, Ujjivan Small Finance Bank is expected to elevate its head of operations Carol Furtado as an interim chief early this week. The bank's managing director and chief executive Nitin Chugh has resigned on Thursday (August 19, 2021), citing personal reasons. Eicher Motors' shareholders in its recently held annual general meeting (AGM) have rejected a proposal for re-appointment of Siddhartha Lal as the company's managing director for a period of five years with effect from May 1 this year. Infra-related stocks could also hog limelight as Finance Minister Nirmala Sitharaman will launch the National Monetisation Pipeline (NMP) on Monday that will include the Centre's four-year plan to monetise its brownfield infrastructure assets.

IDFC First Bank - 6 Point Analysis

Play Episode Listen Later Aug 9, 2021 13:42

IDFC First Bank reported a net loss of Rs.630 Cr in Q1 FY22 from net profit of Rs.94 Cr in Q1 FY21 last year. The loss incurred is mainly due to heavy provisioning (Rs.1,879 Cr) for cushioning the impact of the second wave of the Covid-19 pandemic. On the Operating front, the bank reported strong operating performance in terms of growth in Net Interest Income, Operating Profit and expansion in NIM. Though stressed asset pools and NPAs remained a key concern for the bank. Here is a 6 point analysis of IDFC First Bank based on Q1 FY22 results.

covid-19 operating rs nim first bank npas idfc idfc first bank

Can India beat the Financial Tsunami that is coming? | The Deshbhakt with Akash Banerjee

The DeshBhakt With Akash Banerjee

Play Episode Listen Later Jun 7, 2021 14:02

Open Demat Account with 5paisa Now! Use code OFFER250 to begin with money already in your account! https://www.5paisa.com/open-demat-account?ReferralCode=Offer250&utm_source=Influencer&utm_medium=YouTube&utm_campaign=akashbanerjee&utm_term=5PUSP&utm_content=5june The peak of Covid's 2nd Wave may be behind us - but there is a bigger tsunami that could hit us soon. A massive 2nd Financial Wave that is already causing deep damage to the economy. Already the first wave has put us on the economic ventilator - now the 2nd wave has hit 1 crore jobs / lowered manufacturing / increased NPAs and threatens to push the GDP back further than the 2 years it has already gone. .... we also go through some of the measures that the Govt should adopt immediately. *** Unlock MEMBER ONLY - Discord / Chats / Content PATREON - https://www.patreon.com/thedeshbhakt YOUTUBE - https://www.youtube.com/channel/UCmTM_hPCeckqN3cPWtYZZcg/join MERCH - https://kadakmerch.com/thedeshbhakt Chapter Heads: 00:00 - Is the worst over? 00:40 - The coming financial 2nd wave 02:14 - India pushed back 2 years! 04:54 - Even Bangladesh rushes ahead 06:08 - Inflation the silent killer 09:11- 2010-2020 - The Lost Decade for India 10:42 - How to get growth back on track? *** SUBSCRIBE / FOLLOW US *** YouTube: - https://youtube.com/thedeshbhakt Twitter :- https://twitter.com/thedeshbhakt Web - https://thedeshbhakt.in/ Instagram :- https://instagram.com/akashbanerjee.in Facebook :- https://www.facebook.com/akashbanerjee.in Podcast - https://anchor.fm/thedeshbhakt **More DeshBhakt Videos** The Deshbhakt Episodes: https://bit.ly/3eLgvLv INDIA IN EMERGENCY: https://bit.ly/3dM4Bj8 Bhakt Banerjee Rocks: https://bit.ly/2VuFQlf B&D Media and the Public: https://bit.ly/389jjzw Akash-Vaani: https://bit.ly/3eKvN3h Credits : Writer : Akash Editor : Tushar Chaudhary Producer : Avishrant Singh Resources : https://www.moneycontrol.com/news/trends/current-affairs-trends/heres-how-indias-gdp-growth-compares-with-the-rest-of-the-world-6967011.html https://www.indiatoday.in/india-today-insight/story/why-most-agencies-are-slashing-india-s-gdp-growth-estimates-for-this-fiscal-1808697-2021-05-30 https://www.livemint.com/economy/red-marks-all-over-india-s-economic-report-card-11622011092635.html https://asia.nikkei.com/Spotlight/Coronavirus/Indian-economy-faces-long-slog-to-recovery-from-COVID-carnage --- Send in a voice message: https://anchor.fm/thedeshbhakt/message Support this podcast: https://anchor.fm/thedeshbhakt/support

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The benefits of making a strategic break in your routine

The Michael Martin Show

Play Episode Listen Later May 18, 2021 7:10

Subscribe to the show Refresh and restart. Although you can probably smell the smoke, sometimes you can't see where the fire is when you're standing on top of it. Take a few days off in this environment to clearly see all the NPAs (non-productive activities) that you might have accumulated since March 2020. It will save you time, money, and energy. Click here to get your free copy of The Inner Voice of Trading audiobook.

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The benefits of making a strategic break in your routine

The Michael Martin Show

Play Episode Listen Later May 18, 2021 7:11

benefits routine strategic trading refresh inner voice npas

Understanding banking reforms in India after the Narasimham era | The Hindu In Focus Podcast

banking hindu reforms rbi committees financial system npas

Play Episode Listen Later May 10, 2021 30:24

Hosted by G. Sampath The Covid-19 crisis continues to dominate our news coverage, as it rightly should, and while we've doing many episodes on the pandemic, a couple of deep dives into policy issues, which is a trademark of this podcast, got lost along the way. We recorded this podcast last month, just after former RBI governor M. Narasimham passed away, with the aim of understanding his legacy in the context of the current challenges facing the banking sector. Narasimham is perhaps the most influential banker of post-independent India. The reports prepared by the two Committees that he chaired – the Narasimham Committee on Financial System (1991) and the Narasimham Committee on Banking Sector Reforms (1998) – are still the foundational documents for any discussion on banking sector reforms and banking policy. He is also credited with paving the way for epochal moves such as bank mergers, the emergence of new generation private banks, and asset reconstruction companies. But more than two decades after the two Nararimham Committees gave their reports and recommendations, India's banking sector remains plagued by a host of problems, from high NPAs to poor governance, and a disconnect from developmental priorities. So what has been the legacy of Narasimham and the two committees that he chaired? How will India's banking history view his role and contribution to India's banking sector? To throw light on these questions, we spoke with Amol Agrawal, an economic historian and faculty at Ahmedabad University.

Market Wrap, April 5: Here's all that happened in the markets today

Play Episode Listen Later Apr 5, 2021 5:22

A record jump in the Covid-19 cases in the country which led to lockdown-like restrictions in the economically important state of Maharashtra spooked investors on Monday. Besides, a weak PMI manufacturing print for March added fuel to the fire, raising concerns about the pace and strength of the economic recovery. Growth in manufacturing activities slowed to the lowest rate in seven months as increasing Covid cases hit demand. PMI fell from 57.5 in February to 55.4 in the previous month. Against this backdrop, the frontline S&P BSE Sensex dropped 1,449 points in the intra-day deals to hit a low of 48,581 amid heavy selling in banking, financial services, and realty counters. However, a sharp rally in the IT stocks ahead of the March quarter results gave investors some solace and the index ended 870.5 points, or 1.74 per cent, down at 49,159 levels. On the NSE, the Nifty50 index recovered 179 points from the day's low level of 14,459, and settled at 14,638 levels, down 229 points or 1.5 per cent. Bajaj Finance, IndusInd Bank, State Bank of India, M&M, Axis Bank, Bajaj Auto, ICICI Bank, ITC, HDFC, and Bajaj Finserv tanked between 3 per cent and 6 per cent, while other heavyweights like RIL, L&T, and HDFC Bank slipped up to 2.5 per cent. Pain in the broader market, however, was lesser relative to benchmarks as the S&P BSE MidCap and SmallCap indices closed 1.13 per cent and 1 per cent down, respectively. Therefore, the overall market breadth on the BSE was in the ratio of 1:2 with two stocks falling against every stock that rose, compared with a 1:4 ratio on the 30-share index. Given this, analysts say investors should utilise the crash to look at investment-worthy opportunities and buy from a medium-to-long perspective. They, however, caution that the markets are likely to be on a roller-coaster ride all through April given the slew of events stacked up ahead. Sectorally, the Nifty PSU Bank index declined 4 per cent on the NSE, while the Nifty Bank, Private Bank, Financial services indices slipped up to 3.5 per cent. The headline pro forma gross NPAs and net NPAs reported by banks do not reflect the underlying stress on the asset quality of banks as the quantum of loans in the overdue categories has increased post the moratorium period and this will lead to a rise in non-performing assets of the banks. Rating agency Icra expects asset quality pressure for banks to resurface after the impact of the relief measures by the government and the regulator wanes off. It has estimated that the gross NPAs (excluding write-offs) will rise to 9.6-9.7 per cent by March 31, 2021 and 9.9-10.2 per cent by March 31, 2022 from 8.6 per cent as of March 31, 2020. On the contrary, the Nifty IT index jumped over 2 per cent and the Nifty Metal index gained 1 per cent in a weak market on the back of strong earnings expectations and solid global cues, respectively. Individually, shares of Infosys hit a fresh record high of Rs 1,425 after rising nearly 3 per cent on the BSE in intra-day trade on Monday, which propelled the company's market capitalisation to Rs 6.01 trillion-mark. The stock surpassed its previous high of Rs 1,406, touched on March 16, 2021. Besides Infosys, HCL Tech, TCS, and Wipro gained up to 3 per cent. In the metals pack, SAIL, Hindustan Zinc, Jindal Steel, Adani Enterprises, and JSW Steel were up in the range of 2 per cent to 7 per cent. Global markets Stock prices rose to a 1 1/2-month high on Monday after data showed a surge in US employment while US bonds came under pressure on worries the Federal Reserve may bump up interest rates sooner than it has indicated. In Asia, Japan's Nikkei rose 0.8 per cent while MSCI's broadest index of Asia-Pacific shares outside Japan slipped slightly, with China closed for Tomb-Sweeping day and Australia and Europe on Easter Monday.

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A Bad Bank for bad loans: Is it a good idea? | The Hindu In Focus Podcast

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Play Episode Listen Later Feb 23, 2021 31:28

In her Budget speech this year, Finance Minister Nirmala Sitaraman announced that the government will set up a ‘Bad Bank' to better manage the ‘bad loans' (non-performing assets) of public sector banks. The idea, apparently, is to transfer the NPAs of public sector banks to the books of this Bad Bank, which will function as a two-in-one institution – an asset reconstruction company and also an asset management company. It will focus solely on asset recovery, freeing up the banks to concentrate on lending. At least that's the theory. But will it actually work in practice? Will the Bad Bank be effective in cleaning up the NPA mess? If cleaning up the books is the objective, how is a bad bank a better option than, say, the Insolvency and Bankruptcy Code? We explore these questions and more in a discussion with Vivek Kaul, the author of the bestselling Easy Money trilogy. Vivek's most recent book is Bad Money: Inside the NPA Mess and How it Threatens the Indian Banking System.

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The state of India's banking sector today - is it a tragedy? With Tamal Bandyopadhyay

Use Case

Play Episode Listen Later Jan 4, 2021 25:02

Did you know that in 2020 on an incremental basis, more deposits went to private banks in India instead of Public Sector Banks for the first time in history?What is happening to the bad loan mess and NPAs that Indian banks have been forced to deal with by the RBI? Is the worst over?Forced by the rapid pace of technology, can India’s gigantic banking system rapidly evolve to meet the consumer demands? What’s stopping them?In this episode, we’re joined by Tamal Bandhopadhyay to get answers to all these questions and more. As a business journalist, Tamal has covered India’s banking sector for more than 2 decades. He’s published 6 books on the subject and is constantly speaking to the top bosses to get a lay of the land. Now, like Tamal we can’t get the ex-RBI heads or Aditya Puri on our podcast, so he’s really the best person to give a rundown on where India’s banking sector stands today. His latest book HDFC Bank 2.0: From Dawn to Digital has been nominated for the prestigious Gaja Capital Business Book Prize. And ̇we’re delighted that this episode was sponsored by Gaja Capital, one of India’s largest Private Equity firms. Tamal called his latest book ‘Pandemonium: The Great Indian Banking Tragedy’, but is that really so bad? We’ll leave it for you, the intelligent listener, to decide. Get on the email list at turnaround.substack.com

NPAs and increasing citizen participation in government

The Montpelier Happy Hour

Play Episode Listen Later Dec 25, 2020 58:42

December 25, 2020 (pre-recorded 12/11): In Olga and Emilie's search for effective ways to increase citizen involvement in democracy, they turn to Michael Monte. In this episode, Michael outlines Burlington's Neighborhood Planning Assemblies (NPA). What are they? How can they help increase participation? Theme music by Red Heart the Ticker

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NPAs and DPAs: 10 Years Since Massey

"Briefly" by The University of Chicago Law Review

Play Episode Listen Later Dec 23, 2020 51:18

When companies break the law, prosecutors often turn to deferred or non-prosecution agreements to induce reform. But some criticize DPAs and NPAs as an escape hatch for companies to pay their way out of liability. Host Nathan Tschepik discusses DPAs, NPAs, their critics, and their future with Profs. Andrew Boutros (U. Chicago Law) and Brandon Garrett (Duke Law). To take a peek at some of these agreements, check out the Corporate Prosecution Registry (corporate-prosecution-registry.com). Twitter @uchilrev | lawreviewblog.uchicago.edu | Music from bensound.com

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#91 Hope And Despair In India🎧

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Play Episode Listen Later Dec 2, 2020 6:55

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Episode 18: Financial Sector in India's Economy

Transforming India

Play Episode Listen Later Nov 30, 2020 47:44

For those interested in understanding India's banking and Non-banking Financial sectors, there is no better source than this hour-long Episode 18 of the Transforming India podcast. In this episode, co-hosts Arvind Panagariya and Pravin Krishna speak at length with Dr. Viral Acharya, CV Starr Professor of Economics at New York University's Stern School of Business and former Deputy Governor of the RBI. The three discuss the evolution of the Non-performing assets (NPA) crisis, its handling by the government, the role it played in economic slowdown both pre- and post-Covid-19, the impact Covid-19 will have on future bankruptcies and NPAs, and preventive actions the government must take. Dr. Acharya also offers advice on banking sector reform, including privatization. Further, the episode offers a rich discussion of the role that Non-Banking Financial Companies (NBFCs) play in India's financial sector, the crises that engulfed it alongside the NPA crisis in banks, possible remedies, and whether it will be wise to allow non-financial corporations to have their own banks.

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Hot time

Sunrise

Play Episode Listen Later Oct 30, 2020 22:50

Florida survived another day with more than 4,000 new cases of COVID-19. That means we’re closing in on 800,000 statewide. Also, on today’s Sunrise: — It was a hot time in Tampa for Donald Trump supporters. So hot that people began dropping while Gov. Ron DeSantis was warming up the crowd. It got so hot they turned fire hoses on the crowd. Then the President revved ‘em up as he went into rally mode. — While Trump was talking at Raymond James Stadium, Joe Biden was speaking at a drive-up rally in Broward County. — Where do we stand with just four days left before the election? Political scientist Susan McManus says the Sunshine State is actually “the tossup state.” — McManus also talks about NPAs, calm-versus-chaos and what happens after the election. — And finally, checking in with a Florida Man who paid $150 to get mauled by a leopard.

Ep. 153: Fixing NPAs in Indian Banks

The Pragati Podcast

Play Episode Listen Later Oct 29, 2020 81:04

Former RBI Deputy Governor Viral Acharya talks to host Pavan Srinath about understanding and fixing India's persistent Bank NPA problem.This is the first of two episodes on The Pragati Podcast where Viral Archarya talks about his new book, The Quest for Financial Stability in India. The book can be purchased here: http://tiny.cc/viralacharya-bookOn Episode 153, Viral unpacks the problem of NPAs or Non Performing Assets. He discusses how Indian banks continue to suffer from having bad loans on their balance sheets, and how it can halt India's economic progress. He also explores the idea of Fiscal Dominance, and how it has become a 'theory of everything' in India.Viral V. Acharya is the C.V. Starr Professor of Economics in the Department of Finance at New York University Stern School of Business (NYU-Stern) and an Academic Advisor to the Federal Reserve Banks of New York and Philadelphia. Viral was a Deputy Governor at the Reserve Bank of India (RBI) between January 2017 and July 2019, and was in charge of Monetary Policy, Financial Markets, Financial Stability, and Research.Since Episode 143, The Pragati Podcast has been releasing interactive episodes with in-audio links, polls, references, and more that go beyond the usual podcast experience. Listen to this episode on the IVM Podcasts Android App, the Adori iOS App, or from www.tiny.cc/pragati153 for a richer experience. You can access all links and references within the app or web players.For all queries and feedback, email us at pragatipod@gmail.com or reach out to host Pavan Srinath at @zeusisdead on Twitter: twitter.com/zeusisdeadFollow The Pragati Podcast on Instagram: instagram.com/pragatipod & Twitter: twitter.com/thinkpragati & Facebook: facebook.com/thinkpragatiThe Pragati Podcast is made possible thanks to the support of The Takshashila Institution and the Independent Public-Spirited Media Foundation (IPSMF).

Episode 227 – the Sending the Elevator Back Down edition

This Week in FCPA

Play Episode Listen Later Oct 23, 2020 28:25

As the Great Women in Compliance hosts publish their first book and Goldman Sachs settles its massive FCPA enforcement action over 1MDB, Tom and Jay are back to look at top compliance articles and stories which caught their eye this week. 1. Goldman Sachs settles FCPA enforcement action involving 1MDB. See, DOJ Press Release and Remarks of Acting Assistant Attorney General Brian Rabbitt. 2. What have we learned? Team #GWIC (Mary Shirely and Lisa Fine) publish their first book, Sending the Elevator Back Down. Annoucement on CCI. 3. What are the lessons of J&F Investments? Tom takes a deep dive in a 5-Part series on the FCPA Compliance and Ethics Blog. Part 1-Introduction, Part 2-the Bribery Scheme, Part 3-the SEC Order, Part 4-the Plea Agreement, Part 5-Final Thoughts. Mike Volkov does as well in a 4-Part series on Corruption Crime and Compliance. Part 1, Part 2, Part 3, Part 4. Tom and Matt Kelly go into the weeds on Compliance into the Weeds. 4. World Bank to put more resources into evaluating compliance programs. Joshua Ray in the FCPA Blog. 5. Do DPAs and NPAs encourage recidivism? Dylan Phillips continues the debate in the FCPA Blog. 6. Is there more corruption now in college sports? Pat Forde in SI.com. 7. What is the future of financial fraud? Jonathan Karpoff in the Harvard Law School Forum on Corporate Goverance. 8. Will FinTech be the great enabler of the next Industrial Revolution? Ingrid Vasiliu-Feltes on xpertsleague.com. 9. The Everything Compliance gang is back. In this episode, they consider what enforcement might look like under a Trump or Biden Administration. Listen here. 10. On the Compliance Podcast Network, on 31 Days to a More Effective Compliance Program, we continue our exploration of compliance for Business Ventures. Monday-Tying it all together for JVs; Tuesday-Know Your Customer; Wednesday- the Corporate Controller and Business Ventures; Thursday- Financial review of your business venture partner; Friday-Distributors as Business Venture Partners. Note 31 Days to a More Effective Compliance Program now has its own iTunes channel. If you want to binge out and listen to only these episodes, click here. 11. Join Tom and Sam Silverstein for an Executive Forum on Ethics and Accountability on October 28, 2020 12-1 PM CT. Check at the agenda and register here. 12. Join Tom, Holly Sais Phillippi, Head of Americas Risk Sales, Refinitiv and Kelly M. Slavitt in a Refinitiv sponsored webinar, The Future of Due Diligence: Third-Party Risk in the Era of COVID-19, Tuesday, October 27, 1-2 PM CT. Check at the agenda and register here. 13. Check out the replay of the Navex Next 9th Annual Risk & Compliance Virtual Conference event Beyond the Moment. For more information, go here. Tom Fox is the Compliance Evangelist and can be reached at tfox@tfoxlaw.com. Jay Rosen is Mr. Monitor and can be reached at jrosen@affiliatedmonitors.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Market Ahead, October 19: Top factors that could guide markets this week

Play Episode Listen Later Oct 19, 2020 3:36

The domestic equity market this week will be guided mainly by quarterly earnings data of some of the marquee names, while coronavirus-related updates and global trends will also be closely tracked by investors. The benchmark indices ended the last week down over 1 per cent after witnessing gains in the previous two weeks in a row. In terms of the quarterly earnings, a total of 171 companies including Hindustan Unilever, Bajaj Auto, Nestle India, YES Bank, and Tech Mahindra are scheduled to announce their September quarter results. But first, investors will react to the quarterly results of HDFC Bank announced over the weekend. India's largest private sector lender reported a healthy September quarter result with its net profit rising by 18.4 per cent to Rs 7,513 crore on substantial growth in interest earnings and other income. The gross NPAs declined to 1.08 per cent, while the net NPAs were at 0.17 per cent in September 2020. On the Covid front, India's daily cases continued to come down, with the country reporting 55,511 new cases on Sunday. The case tally now stands at 75.4 lakh with 1.14 lakh deaths. Meanwhile, a government-appointed Covid-19 Supermodel Committee has said that Covid-19 infections peaked in September in India and if all precautions are followed, the pandemic may run its course by early next year. Besides this, market participants might remain cautious ahead of the US presidential elections in the first week of November and hence keep themselves to stock-specific moves. They will also track the foreign fund flows to gauge the investment trend of the major players. Last week, FIIs net bought Rs 1,186 crore worth of shares while domestic institutional investors net sold Rs 2,389 crore of selling in the previous week. Besides, the Rupee's trajectory, and oil price movement will also be on investors' radar. There's some more activity in the primary market. Equitas Small Finance Bank will open its initial public offering for subscription for three days, starting October 20, with a price band at Rs 32-33 per share. The company plans to raise Rs 517.6 crore via the issue which consists of a fresh issue of Rs 280 crore and an offer for sale of 7.2 crore equity shares by promoter Equitas Holdings. And, in the end, let's look at the global cues for today. Asian markets started higher on Monday, buoyed by hopes of a US fiscal package before the US presidential elections next month. MSCI's broadest index of Asia-Pacific shares outside Japan added 0.26 per cent for its second straight day of gains. Japan's Nikkei climbed about 1 per cent while South Korea's KOSPI and Australian shares were up 0.7 per cent each. On Friday, the Dow Jones rose 0.39 per cent, the S&P 500 gained 0.01 per cent, and the Nasdaq Composite dropped 0.36 per cent on Wall Street.

#28 The Great Indian Economy with Salman Anees Soz

Lights | Camera | Azadi

Play Episode Listen Later Oct 3, 2020 102:59

Salman Anees Soz is an economic development expert, author, and commentator. He is a former World Bank officer with experience across a range of economic development issues in Eastern Europe and Central Asia, Middle East and North Africa, Sub Saharan Africa, and South Asia1.Status of the Congress Party2.Economic situation before lockdown3.Economic data reliability of India4.BJP's inexperience in economic management5.Does the blame of bad economy roots to demonetization6.NPAs during UPA7.IBC and Jaitley's legacy8.Increase in government spending9.Schools in Kashmir10.Learning outcomes11.Universal health and education12.Privatization in India13.India's manufacturing sector14.Ease of doing business15.Direct Bank Transfer16.Suggestions to improve the economy17.Fiscal deficit18.The crisis in Banking19.Climate change1. कांग्रेस पार्टी की स्थिति2. लॉकडाउन से पहले आर्थिक स्थिति3. भारत की आर्थिक डेटा विश्वसनीयता4. आर्थिक प्रबंधन में भाजपा की अनुभवहीनता5. क्या खराब अर्थव्यवस्था का दोष विमुद्रीकरण पर है6. यूपीए के दौरान एनपीए7. IBC और जेटली की विरासत8. सरकारी खर्च में वृद्धि9. कश्मीर में स्कूल10. सीखने के परिणाम11. सार्वभौमिक स्वास्थ्य और शिक्षा12. भारत में निजीकरण13. भारत का विनिर्माण क्षेत्र14. व्यापार करने में आसानी15. डायरेक्ट बैंक ट्रांसफर16. अर्थव्यवस्था में सुधार के सुझाव17. राजकोषीय घाटा18. बैंकिंग में संकट19. जलवायु परिवर्तन

#72 Should Courts Make Social Policies?🎧

Play Episode Listen Later Sep 27, 2020 20:14

This newsletter is really a weekly public policy thought-letter. While excellent newsletters on specific themes within public policy already exist, this thought-letter is about frameworks, mental models, and key ideas that will hopefully help you think about any public policy problem in imaginative ways. It seeks to answer just one question: how do I think about a particular public policy problem/solution?PS: If you enjoy listening instead of reading, we have this edition available as an audio narration courtesy the good folks at Ad-Auris. If you have any feedback, please send it to us.India Policy Watch: Rajan-Acharya on PSB ReformsInsights on burning policy issues in India— RSJRaghuram Rajan and Viral Acharya have a new paper titled, Indian Banks: A Time To Reform?, that looks at a comprehensive set of reforms that will enable public sector banks to drive the Indian economic growth engine instead of being a drag they currently are. Rajan and Acharya have held leadership roles at the RBI and know a thing or two about issues relating to the banking sector. Here’s a nice summary of the recommendations by the BloombergQuint.So, what to make of them? There are 4 points we’d like to raise:Is this the time? Rajan and Acharya argue maintaining status quo is untenable. The huge strain on government finances now shifts the Overton window for much-needed reforms of the public sector banking system. This is their hope. In my view, shifting the status quo at this time carries the risk of falling off the brink. There’s a fog of uncertainty about the duration of the pandemic, the state of our public finances and the nature and length of recovery. More than any immediate reform we need some stability, however precarious, at this moment.What about the empire? The paper reiterates the need for a systemic solution to the bad loan problem. The idea for a nationalised and a private “bad bank” is revived along with a strict time-bound process for bankruptcy procedure. The recent books by Urjit Patel (who succeeded Rajan) and Acharya have outlined in great detail how there’s no incentive for anyone in the political economy or in the banking sector to implement the IBC process. Everyone is happy kicking the can down the road. Any attempt at enforcing strict insolvency guidelines is met with resistance. Patel named the relevant chapter in his book ‘The Empire Strikes Back’. And this resistance to change was the state of affairs before the pandemic. So, to expect a serious reckoning by the government now is out of question. In fact, we seem to be going the other direction. The suspension of IBC is to be extended by another quarter and the restructuring proposal by Kamath committee leaves the discretion with the bank on triggering default procedure. We will have to learn to live with elevated levels of NPAs and banking system stress especially in public sector banks (PSBs).Who will implement them? There are proposals to improve the performance of PSBs through greater operational freedom, performance-linked bank financing plans and winding down the Department of Financial Services (hah!). While these are good intentions, operationalising them in a system that has bloated cost structure, unionisation and relatively lax performance management culture won’t be easy. There are suggestions that are akin to the Kamath committee on giving loans based on cash flow and liquidity position of the companies instead of their assets. More aggressive norms for provisioning for bad loans and making sure the promoters have skin in the game in long-term infrastructure projects are also suggested. There are other suggestions to manage banking system risks better that have been around for some time. But implementing them will mean standing up to the ‘empire’. Is stake sale the panacea? Finally, we have the issue of the ownership structure of banks. The paper proposes bringing the stake of the government below 50 per cent (state-linked banks) and gradual privatisation of select PSBs. While this step to create a distance between it and the everyday operations of the bank is necessary, this alone won’t address the governance issues of the PSBs. There’s an entire superstructure (the ‘empire’) that manages and lives off the PSBs that includes unions, bureaucrats, various oversight committees and temporal political interests. This influences everything from recruitment, performance management, promotions, disbursement guidelines to risk management practices. This won’t change overnight merely because the government stake is below 50 per cent.The paper brings together all the extant issues relating to banking reforms in India. In that sense it is a valuable compendium of ideas – most old, some new. The key question remains: what’s the political will to take up these reforms now? The authors are aware of this too:“While we have put together a variety of suggestions, many of these have been discussed in the past. Many concern public sector banks and their governance. Is there any reason to be more confident they will be implemented now?”And they bring up the issue of incentive. What’s in it either for the bureaucracy or the government (either this or any in future) to take up these urgent reforms? As they write in conclusion:“The government obtains enormous power from directing bank lending. Sometimes this power is exercised to advance public goals such as financial inclusion or infrastructure finance, sometimes it is used to offer patronage to, or exercise control over, industrialists. The government also has potential access to an enormous amount of sensitive information through its state ownership – for instance, the identity of purchasers of electoral bonds is known only to the State Bank of India. The government can oblige party members by appointing favorites to positions in public sector banks, including on their boards – and once there, some of these appointees use their influence to direct bank loans to favored parties. Parliamentarians of all parties are not immune to the lure of public sector banks – the banks are often asked to arrange the logistics for their fact-finding committee meetings in enjoyable locales across the country. And Finance Ministry bureaucrats are reluctant to let go of the power that allows a young joint secretary to order the chairpersons of national banks around.”Just reading that passage is kind of depressing. Besides the above, the ordinary citizen isn’t exercised by the deteriorating condition of public sector banking in India. It will never be an issue in any election. Rajan and Acharya believe the pandemic and the enormous resource constraints it will place on the government will make it difficult to recapitalise the banks. This in turn will curb credit flow and impede growth in the economy. “With government deficits and debt levels reaching enormous levels, there simply are not enough budgetary resources to recapitalize banks. An encumbered, under-capitalized public sector banking system will not lend well, which will be a huge tax on growth, as it has been for the last six years. More worrisome, without reform the banks will cumulate further losses. Status quo is simply not an option.”“It is important that the government use the urgency of the moment to draw key players together to develop a reasonable reform path; it should be comprehensive and not just a one-off “tick-the-box” exercise dealing with a thin sliver of issues. It should then reach a consensus with concerned players such as unions and political parties, and then embark on the reforms.”We aren’t as sanguine as they are. The political capital that will need to be spent (or invested) in implementing the reforms they have suggested in this paper is enormous. While this government and the PM enjoy unprecedented goodwill and support, this is a bet that might just be too big even for it. The PM has shown an appetite for ‘bold’ steps. But they tend to be one-off events. A deeper and deliberate structural reform of this kind that will take years to implement will be a genuine bold measure. One can only hope he take that step. A Framework a Week: Nine Competing Visions of EqualityTools for thinking public policy— Pranay KotasthaneAssume the Indian government plans to distribute ₹50,000 crores to 50 crore Indians this year, how would it go about doing this equitably? The intuitively obvious solution is to divide the sum equally — ₹1000 to everyone. Simple, isn’t it? Think again. Isn’t it unfair to the nearly 80 crore people left out of this distribution in the first place? Even amongst the chosen 50 crore Indians, isn’t equal division unfair to some who need this money more than others? Isn’t it unfair to the socially disadvantaged groups who might not even have access to prove their identity?This is what Deborah Stone calls the paradox of distribution in her textbook Policy Paradox:“equality often means inequality, and equal treatment often means unequal treatment. The same distribution may look equal or unequal, depending on where you focus.”This is a key insight. Stone lays out a useful framework for thinking about what equality means. She lists nine ways in which one can use equity language to distribute, often in ways that you would consider to be unequal. Each of these ways equalises along one dimension and can be considered as being ‘unequal’ on another. These nine ways are split along three dimensions — who gets something, what gets distributed, and how is the distribution done. (Deborah Stone, Policy Paradox, Page 47)Way 1 deals with membership. It’s easy to say that things should be divided equally amongst all but who constitutes this all is a tricky question. Citizenship, for example, is a membership criterion that is exclusive by nature. Way 2 deals with merit. It argues that the more deserving should be rewarded for their accomplishment. Hence, any distribution problem should also be resolved by identifying achievement or aptitude.Way 3 is a claim that resources should be allocated based on ranked subgroups. For example, employees in all organisations are paid according to rank. Equally ranked get equal pay, unequally ranked get unequal payouts.Way 4 is a claim for group-based distribution. Caste-based reservation is an example of this kind of equality.Way 5 expands the boundaries of the item. If the government were to distribute the Rs 50000 crore only to those Indians who haven’t received their rations from the public distribution system in the last one month, the boundary of the item being distributed changes from only cash to a basket comprising of cash and food.Way 6 is a claim on distribution according to the value that the recipients ascribe to that item.Ways 7, 8, and 9 are about equalising the process. Way 7 talks about distribution based on fair competition between all players. Way 8 talks about distributing based on a lottery so that chances are equalised. Way 9 calls for a vote to decide who gets what.This categorisation into nine definitions of equality is useful for a policy analyst. There’s no right answer on which of these is the best method, of course. What can be said is that Way 1 (equal slices amongst all members) and Way 8 (lottery) are intuitively powerful and are used by policymakers when they can't find better reasons to justify their decisions.So the lesson for a policy analyst is that faced with a distributive problem, look at these definitions of equality and pick one that seems the fairest. It’s easy to say that inequality is a problem. It’s far more difficult to answer what being equal means.World Policy Watch: Tool To Change Social NormsInsights on burning policy issues in India—RSJShould courts be framing social policies? This question is the subtext of a number of articles that have appeared since the death of US Supreme Court (SC) associate justice, Ruth Bader Ginsberg (RBG) last week. The Trump administration is moving with speed to get a conservative judge confirmed by the Senate before the elections in November. The Republicans control the senate and nominating a judge of their ideological persuasion now will decisively swing the 9-member SC bench to a 6-3 ‘conservative’ majority. Why has nominating a judge to the highest court turned into such a contentious political issue? Not so long back judges would get nominated with overwhelming majority from the Senate. RBG won her confirmation with a 96-3 majority. Justice Antonin Scalia who was on the other end of the ideological divide won his nomination 98-0. The days of such bipartisanship are over. Why? All About IncentivesLike everything in life, it is about incentives. First, the lifelong tenure of a judge means they have the ability to influence decisions for a long period of time. As the ideological divide has gotten sharper, both Democrats and Republicans are keen on nominating more ‘extreme’ judges. Second, there’s an incentive to nominate relatively younger judges who will sit at the SC for a long time and influence decisions. This has meant nominating less experienced jurists who are ideologically ‘pure’. This riles up the other side. Lastly, an increase in the number of judgments that are decided by the slenderest of margins (5-4) works as a feedback loop to the parties. It feeds into their anxieties of what’s at stake and they have greater motivation to nominate more extreme candidates.At the heart of these debates is a deeper question about the larger role the SC has taken over the years in legislating social issues in the US. The two most famous examples, of course, are Roe vs Wade and Brown vs Board of Education. Courts have turned into lawmakers is how it appears. Seen from here in India, US is a litigious country. As far back as 1835, Tocqueville had noted ‘sooner or later, every major dispute in the US ends up in courtroom.’ So, it is no surprise when women, minorities and other under-represented sections started contesting the social norms handed down to them, the matters reached courts for resolution. The Conservative AnxietyThe conservative preference is for any social change to be gradual. Societal change is shaped through the many eddies of debates and protests that resist the flow of the mainstream. As they gain wider acceptance, they begin changing the course of flow of social norms. This could be painstakingly slow, but it makes change acceptable and sustainable. For the conservatives, the role of the judges is to apply laws, not to create them. Going beyond this brief becomes judicial activism. So, the original conservative view was all issues of public or social policy should be discussed and debated by the legislative and executive branches of the state that represents the society. Courts resolve disputes following the written down law while sending back any ambiguities to the legislative arm for approval. There is a lot of merit in this argument. It is difficult to imagine how a single complainant with a specific grievance in a combative judicial process be the basis for drafting a norm for the society. Isn’t there a risk of the courts overlooking the true costs and benefits to the society while judging a single case? Would the second order impact of their decision be visible to them? Should we allow the judges to bring in their personal values into issues of constitutional merits? And let’s not pretend judges are above this. ‘Judicial activism’ is unavoidable if we let courts decide on such issues. In fact, the current debate in the US about nominations is an implicit acceptance that judges insert their personal code into judgments. When you consider the adversarial nature of many historic social judgments (both in the US and India) and the costs such a process extracts in polarising the society further, it becomes clear litigation is a blunt instrument to carve out social change. Courts shouldn’t pre-empt social and political debates. The Liberal ActivismThe liberal position, as it has evolved over time, is marked with suspicion of the society reforming itself. The classical liberal approach to this problem was to accelerate the process of change in the society. This was to be achieved through a combined political, social and cultural assault on the bastions of conservatism in the society. This led to the portrait of a liberal as a perpetual activist in a constant state of mobilisation to upend existing norms. The liberal belief that society must change from within was no different from the conservative stance. The difference was on the need to induce change through proactive measures and on the speed of change. This need for speed eventually led the liberals to the courts. To the liberals, this wasn’t difficult to justify. The law isn’t ever ‘value neutral’. Like Sahir Ludhianvi once wrote (Chitralekha, 1964):“Yeh paap hai kya, yeh punya hai kya, reeton pe dharm ki moharein hai,Har yug mein badalte dharmon ko kaise aadarsh banaoge?” What’s right or wrong has always been a compilation of enforceable values. This is a forever changing or evolving construct. Since people use these values in their daily lives, the courts can define their boundaries of ‘reasonableness’. A couple of other reasons nudged the liberal position closer to supporting judicial activism. First, it became clear that there can be no regime where every issue of public policy can be resolved through the executive or legislative arms of the state. How representative is the legislature anyway? Or, how compromised? This centralised policymaking unit that changes every few years in a democratic process can’t be expected to draft policies that will be considered the final word and stand the test of time. Also, there are common laws that precede the state and changing them requires blunt force of law itself. Second, as the legislative environment turned more partisan and dysfunctional, the drafting of laws became more imprecise or vague to accommodate political bargains. This has meant a constant need for interpreting or divining the legislative intent of laws. This act of precise interpretation and proofreading has turned judges into lawmakers by default. Lastly, the liberals who are often blamed for nominating activist judges argue this is a matter of perspective. Only when the issue at hand goes against the conservative agenda, it is considered judicial activism. Not otherwise. The Perils Of (Any Kind Of) CentralisationBased on evidence it can be argued the conservatives have lost the argument. The courts are at front and centre of social policymaking today. The many historic judgments that cleave the US society are evidence of it. The legislative arms of the state representing the society aren’t drafting these laws. But here’s the irony. The conservatives have co-opted the liberal model. With a few strokes of good fortune, the single-minded agenda of turning the US SC bench into conservative majority has been fruitful. The peril of pushing social change into the cabins of a powerful, centralised and an autonomous institution is clear to the liberals now when the shoe is on the other foot. A blunt instrument doesn’t look blunt till it is in the hands of your adversary. The path of wresting back control to the society will be long and arduous. Matsyanyaaya: COVID-19 Warrants Long Overdue Doctrinal Shifts in Military PlanningBig fish eating small fish = Foreign Policy in action— Pranay KotasthaneLt Gen Prakash Menon and I have a new paper out in the inaugural edition of the Indian Public Policy Review journal.We argue that the economic shock of COVID-19 makes the current method of defence budgeting redundant. When the GDP itself is set to reduce, defence expenditure demands as a percentage of GDP is less feasible. On the other hand, the situation on the Line of Actual Control (LAC) in Ladakh has demonstrated again that managing China, not just Pakistan, should be the focus of India’s military planning. To overcome these two challenges, a few incremental budget cuts, postponing of capital acquisition plans, and forgoing of salaries for a day would be insufficient. Instead, we argue that it’s imperative to address the mismatches between India’s political objectives and the kind of force structure put in place to meet those objectives. We identify four such mismatches.Derived from these mismatches, we propose six doctrinal shifts — a paradigm of employable power, a structure for integrated theatre commands, conversion of manpower to human capital investment, organisational changes to build firepower, and a shift in focus to the seas and new domains.Do read and let us know what you think. HomeWorkReading and listening recommendations on public policy matters[Article] Excerpts from Charles Tilly classic Misreading, then Rereading, Nineteenth-Century Social Change.[Article] The P.J. Nayak committee (2014) report on Banking reforms. It has a lot of points that remain relevant.[Paper] A must-read paper on equality and fairness by Christina Starmans, Mark Sheskin and Paul Bloom. Money quote: “humans naturally favour fair distributions, not equal ones, and that when fairness and equality clash, people prefer fair inequality over unfair equality”.[Article] Looking beyond reservations for equality. That’s all for this weekend. Read and share. Get on the email list at publicpolicy.substack.com

covid-19 money donald trump china social education simple board indian stone republicans democrats senate roe v wade status pakistan framework banking policies indians ruth bader ginsburg gdp patel citizenship courts foreign policy financial services empire strikes back rs societal judicial equally excerpts rbi caste overton derived ibc alexis de tocqueville rajan antonin scalia parliamentarians ladakh acharya yeh paul bloom state bank nayak misreading rereading npas psbs actual control lac bloombergquint viral acharya urjit patel

#69 Abe Yaar! Lessons From 'Japanification'

Play Episode Listen Later Sep 16, 2020 11:40

This newsletter is really a public policy thought-letter. While excellent newsletters on specific themes within public policy already exist, this thought-letter is about frameworks, mental models, and key ideas that will hopefully help you think about any public policy problem in imaginative ways. It seeks to answer just one question: how do I think about a particular public policy problem/solution?Welcome to the mid-week edition in which we write essays on a public policy theme. The usual public policy review comes out on weekends.PS: If you enjoy listening instead of reading, we have this edition available as an audio narration courtesy the good folks at Ad-Auris. If you have any feedback, please send it to us. Listen in podcast appShinzō Abe, the longest-serving Japanese PM ever, stepped down from office last week. His second term that began in late 2012 was marked by his prescription for reviving Japanese economy. The world called it Abenomics. Through a mix of unconventional monetary policy, robust fiscal stimulus, and structural reforms to boost growth, Abenomics was seen as a marked departure from the timid response that characterised the previous regimes. Abe was determined to jolt Japan out of the economic morass it had dug itself in for over a quarter-century since 1990. We will discuss Abenomics and what lessons it holds for us in more detail later. But let’s go back to the lost decades of Japan that gave us the pejorative term ‘Japanification’ and understand what happened during that time.Bubble, Bust And No RecoveryJapan was the miracle economy following WW2, benefitting from U.S. largesse in infrastructure spending, government investments in technology and research, rise in entrepreneurship and increase in factor productivity for over three decades. Low-interest rates and all-round prosperity in the 80s led to an asset bubble. The stock market and real estate valuations went through the roof on the back of speculations and easy credit policy. There’s an urban legend (or truth?) of three sq.mts. of land near the royal palace being sold at US$ 60,000. That meant the appraisal value of the palace was more than the state of California then. In little over 25 years from 1960, the land value went up by 5000 per cent in Tokyo and other major cities. By the end of 1989, the Nikkei index was at its historic high of 39,000. This was a bubble and like all bubbles, it popped in 1990.Japan hasn’t recovered since. The obvious reasons were discerned immediately. The policy response to the bubble was to increase interest rates and quell speculation. But as the equity market and real estate prices crashed, borrowers who had overleveraged themselves were trapped. A debt crisis soon followed with widespread loan defaults. The contagion now engulfed Japanese banks who were staring at a huge pile of NPAs. The credit dried up, investments fell, and the growth slowed dramatically. The sentiment turned negative and the consumers cut down on spending. This began a deflationary cycle. The Bank of Japan (BoJ) was slow to respond and the deflation spiral set in. Why would you spend today when you know the prices would be lower in future? BoJ began cutting interest rates and brought it below 1 per cent by mid-90s to spur investment. But these actions weren’t coordinated with a fiscal response. The hike in consumption tax in 1996 meant the further dampening of consumption sentiments. The loan default crisis led to the collapse of three banks in mid-90s. By 1997, as BoJ and the government were getting their act together, the Asian financial crisis dealt a crippling blow to the economy. This set it back for another three years. What Went Wrong?Krugman in 1998 argued the lost decade of the 90s was because of monetary policy failure. His view was the BoJ should have publicly taken a high inflation target that would have avoided a deflation and prevented interest rates from going down to zero. Of course, this is supported by theory. A higher inflation target anchors inflation expectation at a higher number and this increased expectation in turn leads to higher inflation because of the forward-looking aspect of the aggregate supply equation. Further, the increase in inflation expectation would reduce the real interest rate because it takes time for nominal interest rate to reach its long-term level. In the short-term, this reduced real interest rate stimulates growth which in turn increases inflation. A kind of a virtuous cycle sets in. Anyway, this wasn’t done by BoJ. The other option was to reduce the interest rate to zero quickly and provide substantial monetary stimulus quickly to check loss in output. A combination of a high inflation target (as suggested by Krugman) and monetary easing policy could have possibly worked.Between 2001-06, the BoJ went on a quantitative easing overdrive purchasing long-term Japanese government bonds. After the global financial crisis of 2008-09, the BoJ extended this programme to purchase private sector financial assets including corporate bonds, ETFs (therefore equity in private companies), CPs and invest in real estate investment trusts (REITs). This had an impact on financial markets with stock markets rising, fall in bond yields and increase in corporate bond issuances. But this expansionary policy came at a cost. The debt to GDP ratio which was around 60 per cent in the 90s went up to 240 per cent by 2012. However, all of these measures didn’t move the needle on inflation. It is possible a higher purchase of private risky assets like corporate bonds and commercial paper instead of government bond would have spurred growth and raised inflation expectations. But that was not to be. Separately, the lack of coordination between monetary and fiscal policies hurt the economy. There were multiple increases in taxes to balance the budget while the monetary policy was working to increase consumption sentiments. Lastly, there was a lack of clear communication to manage expectations among the public about long-term inflation, interest rates or growth. A forward-looking guidance by the central bank on these parameters provides assurance to market participants more so when the financial system is weakened by high NPAs and general risk aversion. A recent example of this was seen when the US Fed indicated it will purchase corporate bonds as part of its stimulus during the pandemic. The planned purchase announcement itself did the trick in raising bond prices before Fed actually bought a single one of them. Abenomics In PlayShinzo Abe and BoJ Chairman Haruhiko Kuroda assimilated the learnings from the lost quarter-century to formulate the ‘three arrows’ of the Abenomics in 2013. The three arrows were:A monetary policy based on qualitative and quantitative easing (QQE) framework with a 2 per cent inflation target, significant purchase of long-duration government securities and private risky assets, expansion of BoJ balance sheet and upfront guidance on these numbers. BoJ promised to double its monetary base to 54 per cent of the GDP by 2014. A robust fiscal policy that increases absolute government spending on areas like public infrastructure, welfare for its ageing population and servicing the debt. This was to be done in close coordination with the monetary policy actions.Structural reforms to spur growth and private investment. This includes lower corporate tax, increase in participation of women in the labour force, more immigration and acceptance of high-skilled foreign workers, more inbound tourism to Japan and championing free trade (TTP), lower FDI barriers and global liberal order to counter China.You couldn’t fault their prescription based on what they learnt from their past. Abenomics wasn’t a radically new construct but in bringing the three arrows together, setting targets for them and then communicating it clearly indicated Abe meant business. Japan needed to be jolted into a path of recovery and this was the way to do it. The salience of Abenomics grew as more economies, including US and EU, followed the path of QE to stimulate growth and manage financial stability. Did It work? Well, it is a mixed bag. The inflation in Japan remained persistently below 1 per cent. The primary objective of the 3 arrows was to ‘warm up’ the economy to an extent that spurs demand and gets the investment cycle going. On that count, it failed. It has seen limited success in increasing women labour force participation, more immigration and in keeping debt to GDP at a near-constant level of 240 per cent (pre-Covid) despite the increase in monetary base. It’s not an unqualified success. The counterfactual, of course, can be asked. Could Japan be worse off today if not for Abenomics? I think it would. Lessons From AbenomicsSo, what are the lessons learnt from 7 years of Abenomics in Japan? Robin Harding writing for the Financial Times has six lessons from Abenomics for the world struggling with ‘Japanification’. I am paraphrasing below: Monetary policy through massive purchase of government securities and private assets work. The ‘bazooka’ of 2013 had a positive impact on the Japanese economy – stock markets boomed, credit uptake went up and unemployment fell.Despite the promise of coordinated monetary and fiscal actions, Abe couldn’t keep fiscal hawks down. The rise in consumption tax from 5 to 8 per cent in 2014 worked counter to the efforts in increasing consumption. The economy went into a recession. Another increase last year to 10 per cent had the same impact. Communication and future guidance on targets didn’t materialise. The promised inflation target of 2 per cent was never met and the consumption tax hikes meant the premise of raising expectations and letting it do the heavy lifting in raising inflation didn’t work. Expectations management works if you meet the expectations. Beyond a point, you need to intervene directly to meet your targets. The key commitments of Abenomics were never kept and soon the market stopped responding to the BoJ plans of further easing. Stimulus doesn’t cause an increase in public debt to GDP ratio going up. We have discussed this already. It remained range-bound at 240 per cent.Structural reforms didn’t cut to the key issues confronting Japanese society – an ageing population leading to a fall in total factor productivity, a disappointed younger generation carrying the burden through levies and taxes on income, strong hierarchical working style stymieing innovation and a reluctance to embrace large scale immigration to get out of this rut (an advantage so far for the US).Our LessonsThese are important lessons for India as we consider the options to revive growth after the pandemic. The fears of an increase in fiscal deficit and a rise in debt, lack of coordination between fiscal and monetary actions and poor communication or guidance to the public about the road ahead should look familiar to all of us. We can avoid these pitfalls and yet bank on the demographic dividend that’s still available to us to have a version of Abenomics work for us. The Abe playbook didn’t work for him, but it could work for his friend, PM Modi.HomeWorkReading and listening recommendations on public policy matters[Paper] Paul Krugman’s famous paper in six parts on Japan’s liquidity trap written in 1998 that explains the reasons for the lost decade.[Paper] Yoshino and Taghizadeh-Hesary in their ADB paper blame structural reasons of Japan for the lost decades. The paper counters the arguments of Paul Krugman that the Japanese economy is in a liquidity trap. For them Japan’s economic stagnation stems from a vertical IS curve rather than a liquidity trap. Get on the email list at publicpolicy.substack.com

Market Ahead, Sep 15: Top factors that could guide markets today

Play Episode Listen Later Sep 15, 2020 4:08

The Indian markets may open flat to positive in today's session, amid mixed global trends. At 7:30 AM, the SGX Nifty was trading around 11,460 levels as compared to Nifty Futures' previous close of 11,451. In the overnight trade, The Dow Jones closed up 1.18 per cent and the S&P 500 rose 1.2 per cent while the tech-heavy Nasdaq Composite added 1.87 per cent. Asian shares, though, opened flat to lower on Tuesday as investors shifted focus to upcoming data and central bank meetings.The US Federal Reserve will start its two-day policy meeting later today, the first since unveiling a landmark shift to a more tolerant stance on inflation in August Australia’s ASX 200 as well as Hong Kong's Hang Seng index were trading flat, while Japan's Nikkei dipped 0.8 per cent. Overall, MSCI’s broadest index of Asia-Pacific shares outside Japan ended up 1.06%. Back home, India's retail inflation softened slightly to 6.69 per cent in August, even as food prices continued to rule high. The combined food price inflation came in at 9.05 per cent, according to the CPI data. Apart from this, investors today will focus on stock-specific moves and corporate results while also keeping track of the newsflow regarding Covid-19 as well as on the India-China front. Domestic steel major SAIL on Monday posted a consolidated net loss of Rs 1,226.47 crore for the June quarter, mainly on account of reduced income. Apollo Hospitals also posted a consolidated net loss of Rs 208 crore during the June quarter as compared to a profit of Rs 57.2 crore, last year. The stocks of both the companies will react in today's session. Besides, a total of 642 companies including Vedanta, SpiceJet, and Future Enterprises are scheduled to announce their earnings today. On the Covid front, India added 81,811 new cases yesterday, taking the case tally to 49.26 lakh. The death toll tally has meanwhile reached 80,808. And now a quick look at other top news The RBI has pulled up banks for delay in automating the process of identifying NPAs, provisioning, and filing returns with the banking regulator. It has asked the banks to comply with the guidelines by June 30, 2021. Indiabulls Housing Finance yesterday said it has raised about Rs 1,205 crore over the last few days through its QIP and partial stake sale in UK-based OakNorth Bank. The NBFC has raised Rs 682.87 crore through the QIP and Rs 522 crore from the partial stake sale. And, ICICI Bank yesterday said it has got exemption from paring stake in its life and non-life subsidiaries to 30 per cent for a period of three years.

RBI's loan restructuring scheme: Here's how it benefits you

covid-19 benefits retail loans scheme restructuring rbi reserve bank monetary policy committee emis npas

Play Episode Listen Later Sep 9, 2020 7:27

First things first, what is a loan restructuring scheme? It is a process used by companies and individuals facing financial distress or on the brink of insolvency to lower and renegotiate their debts and restore liquidity so that companies can continue their business, while individuals get on with their lives. Basically, loans are restrutured to avoid the risk of default on existing debt. The debt restructuring process involves a reduction of the interest rates on loans or an extension of its repayment tenure, or both. These steps improve a company’s chances of paying back the dues. Well, it is a win-win for both parties because the business avoids bankruptcy, and the bankers typically receive more than they would have, had the company been forced into liquidation. Now, on August 6, in view of the Covid-19 pandemic and the resultant stress in the system, the Reserve Bank of India decided to allow lenders to provide a restructuring facility on loans classified as standard as on March 1, 2020. This restructuring will have to be implemented by March 31, 2021, RBI governor Shaktikanta Das said. The decision was announced after the 24th bimonthly meeting of the RBI's Monetary Policy Committee. So, the loan moratorium ended on August 31. Retail borrowers who had availed of it will once again have to bear the burden of paying EMIs.The moratorium gave them some relief in terms of repayment, but the restructuring will give them long-term relief. It will also provide major relief to lenders and reduce financial stability risks to the overall economy, as most bankers were expecting a major spike in their NPAs after the end of the loan moratorium facility. Listen to the podcast to know how it benefits you

The REAL stats regarding nonprofits; An Interview with Brady Josephson

Nonprofit Architect Podcast

Play Episode Listen Later Sep 8, 2020 33:01

In this episode of Nonprofit Architect, Travis discusses with Brady Josephson, an entrepreneur working with "Next After". They focus on core precepts of online fundraising, noting results from studies that show the wrong approaches of many nonprofit organizations to raising funds online. Listen in now and be informed Conversation Highlights [00:41] Brady explains that the concept behind "Next After" is basically to collect data, run experiments to essentially figure out what works in fundraising, and make that information accessible to nonprofit organizations [02:20] Donors lie [09:20] Takeaway #1: The Value Proposition Question; why should I give to you, as opposed to another organization, or not at all? [09:34] Takeaway #2: four perspectives from which a nonprofit organization should answer the value proposition question (Appeal, Credibility, Clarity, and Exclusivity) [13:02] Every different organization has strengths and weaknesses [13:16] Takeaway #3: As an NPO, having something more quantifiable or tangible encourages generosity [15:45] When building a scalable fundraising infrastructure, of which email is one of the strategies, you always need to start work much sooner than you think [16:47] Takeaway #4: Offline donors are worth 90% more if they get emails [17:34] Mystery Shopper Studies conducted involved signing up to receive emails from non-profit organizations over some time, to have an idea of the E-mail methods used by a majority of them. [20:22]Brady reveals that based on the results of their studies, most non-profits are not thanking their donors [21:31] Takeaway #5: The first 30-45-day window is one of the most critical times to continue engagement with a new donor, if not they may not make a second gift in 6-14 months, at which point they're gone. [24:58] Brady's advice to startup NPAs: The Culture of Fund-raising & Being proactive [29:48] He discusses the three metrics of online fundraising (Traffic, Conversation Rate, and Average gift), with the results of some studies relating these metrics to NPAs. [31:03] Google Ad grant gives up to 10,000$ worth of free advertising, with terms. This was discussed in detail in a previous episode (Interview with Preston Cone; Facebook Ads, email copy and secrets behind the Google Ad Grant) Remarkable Quotes: [13:21] "Tangibility leads to generosity" [22:07] "The lifecycle of a donor" [26:39] "Bold is definitely better." Contact Brady Website: www.nextafter.com LinkedIn: Brady Josephson Twitter: @bradyjosephson Brady Josephson is a charity nerd, entrepreneur, digital marketer, professor, and writer. He's on a mission to see more people giving and more causes thriving. At NextAfter, Brady focuses on business development and partnerships, content creation, and marketing. Before coming to NextAfter, Brady worked for the company he started, The Josephson Group, which founded Shift, a digital agency, and Nonprofit Supply Co., a Google Ad Grant advertising service. His work and writing have been featured in CBC, Christianity Today, NPR, and The Chronicle of Philanthropy among others. He has also been a speaker and presenter at conferences in Canada, the US, and Europe including Social Media for Nonprofits, AFP Congress, CyberGrants Conference, RaiseNow Inspire, and BBCON. Learn more about Brady's speaking here. He is also an adjunct professor at North Park University's School of Business and Nonprofit Management, contributes to The Huffington Post, is the creator of The Good Journey Pod podcast, and is founding editor of re: charity — a top nonprofit and fundraising blog. Brady began his career at Spark Ventures, a start-up non-profit doing development work in Zambia, after receiving his Masters in Nonprofit Administration. He oversaw fundraising and marketing there before moving to Opportunity International, the world's largest Christian microfinance organization, where he worked in digital fundraising and then served as National Marketing Director in Canada. Brady then helped start a digital agency working with nonprofits that eventually merged with Chimp, a technology company offering an online platform for charitable giving, where Brady worked in business development and client strategy before launching out on his own. Brady Josephson brady@nextafter.com https://www.linkedin.com/in/bradyjosephson/ Twitter @bradyjosephson https://www.nextafter.com/ https://www.facebook.com/NextAfterInc https://twitter.com/NextAfter_ https://www.linkedin.com/company/next-after/

The REAL stats regarding nonprofits; An Interview with Brady Josephson

Nonprofit Architect Podcast

Play Episode Listen Later Sep 8, 2020 33:02

In this episode of Nonprofit Architect, Travis discusses with Brady Josephson, an entrepreneur working with "Next After". They focus on core precepts of online fundraising, noting results from studies that show the wrong approaches of many nonprofit organizations to raising funds online. Listen in now and be informed Conversation Highlights [00:41] Brady explains that the concept behind "Next After" is basically to collect data, run experiments to essentially figure out what works in fundraising, and make that information accessible to nonprofit organizations [02:20] Donors lie [09:20] Takeaway #1: The Value Proposition Question; why should I give to you, as opposed to another organization, or not at all? [09:34] Takeaway #2: four perspectives from which a nonprofit organization should answer the value proposition question (Appeal, Credibility, Clarity, and Exclusivity) [13:02] Every different organization has strengths and weaknesses [13:16] Takeaway #3: As an NPO, having something more quantifiable or tangible encourages generosity [15:45] When building a scalable fundraising infrastructure, of which email is one of the strategies, you always need to start work much sooner than you think [16:47] Takeaway #4: Offline donors are worth 90% more if they get emails [17:34] Mystery Shopper Studies conducted involved signing up to receive emails from non-profit organizations over some time, to have an idea of the E-mail methods used by a majority of them. [20:22]Brady reveals that based on the results of their studies, most non-profits are not thanking their donors [21:31] Takeaway #5: The first 30-45-day window is one of the most critical times to continue engagement with a new donor, if not they may not make a second gift in 6-14 months, at which point they're gone. [24:58] Brady's advice to startup NPAs: The Culture of Fund-raising & Being proactive [29:48] He discusses the three metrics of online fundraising (Traffic, Conversation Rate, and Average gift), with the results of some studies relating these metrics to NPAs. [31:03] Google Ad grant gives up to 10,000$ worth of free advertising, with terms. This was discussed in detail in a previous episode (Interview with Preston Cone; Facebook Ads, email copy and secrets behind the Google Ad Grant) Remarkable Quotes: [13:21] "Tangibility leads to generosity" [22:07] "The lifecycle of a donor" [26:39] "Bold is definitely better." Contact Brady Website: www.nextafter.com LinkedIn: Brady Josephson Twitter: @bradyjosephson Brady Josephson is a charity nerd, entrepreneur, digital marketer, professor, and writer. He’s on a mission to see more people giving and more causes thriving. At NextAfter, Brady focuses on business development and partnerships, content creation, and marketing. Before coming to NextAfter, Brady worked for the company he started, The Josephson Group, which founded Shift, a digital agency, and Nonprofit Supply Co., a Google Ad Grant advertising service. His work and writing have been featured in CBC, Christianity Today, NPR, and The Chronicle of Philanthropy among others. He has also been a speaker and presenter at conferences in Canada, the US, and Europe including Social Media for Nonprofits, AFP Congress, CyberGrants Conference, RaiseNow Inspire, and BBCON. Learn more about Brady’s speaking here. He is also an adjunct professor at North Park University’s School of Business and Nonprofit Management, contributes to The Huffington Post, is the creator of The Good Journey Pod podcast, and is founding editor of re: charity — a top nonprofit and fundraising blog. Brady began his career at Spark Ventures, a start-up non-profit doing development work in Zambia, after receiving his Masters in Nonprofit Administration. He oversaw fundraising and marketing there before moving to Opportunity International, the world’s largest Christian microfinance organization, where he worked in digital fundraising and then served as National Marketing Director in Canada. Brady then helped start a digital agency working with nonprofits that eventually merged with Chimp, a technology company offering an online platform for charitable giving, where Brady worked in business development and client strategy before launching out on his own. Brady Josephson brady@nextafter.com https://www.linkedin.com/in/bradyjosephson/ Twitter @bradyjosephson https://www.nextafter.com/ https://www.facebook.com/NextAfterInc https://twitter.com/NextAfter_ https://www.linkedin.com/company/next-after/

Ep 8: Out-Arnabing Arnab

Econ Central

Play Episode Listen Later Aug 6, 2020 80:55

There is a race to the bottom in Indian media. It is rational. Its reasons are structural. The state and society must share the blame. Amit Varma and Vivek Kaul explain why in episode 8 of Econ Central. Also discussed: public sector banks, our love for simple narratives and Raat Akeli Hai. Also check out: 1. Raat Akeli Hai -- Honey Trehan. 2. 'Does he look depressed?' -- The Times Now tweet. 3. Television Price Controls -- Episode 27 of The Seen and the Unseen (w Ashok Malik). 4. Why Are Indian News Channels so Disappointing? -- Ashok Malik. 5. The top paid newsletters on Substack. 6. 1000 True Fans -- Kevin Kelly. 7. 1,000 True Fans? Try 100 -- Li Jin. 8. The State of the Media — Episode 46 of The Seen and the Unseen (w Prem Panicker). 9. The State of the Media 2 — Episode 89 of The Seen and the Unseen (w Sidharth Bhatia & Peter Griffin). 10. What Happened to Our Journalism? -- Episode 178 of The Seen and the Unseen (w Nidhi Razdan). 11. Persuasion -- Yascha Mounk's newsletter. 12. Fighting Fake News -- Episode 133 of The Seen and the Unseen (w Pratik Sinha). 13. Non-Performing Assets -- Episode 32 of The Seen and the Unseen (w Vivek Kaul). 14. IL&FS and the Indian Financial System -- Episode 91 of The Seen and the Unseen (w Vivek Kaul and Ashutosh Datar). 15. Overdraft -- Urjit Patel. 16. Quest for Restoring Financial Stability in India -- Viral Acharya. 17. The govt and RBI face a trilemma regarding PSBs -- Vivek Kaul. 18. RBI’s forecast on NPAs has often missed the mark -- Vivek Kaul. 19. Indian banks are in for a ₹20-trillion hole -- Vivek Kaul. 20. Privatisation of banks is a great idea, and will remain so -- Vivek Kaul. 21. Urjit Patel Ko Gussa Kyon Aata Hai? -- Vivek Kaul. 22. Whose Money is it Anyway? -- Amit Varma (on Milton Friedman's four ways of spending money). 23. Indian Board President's XI vs England XI, Vadodara, 2006. 24. The Evolution of Everything -- Episode 96 of The Seen and the Unseen (w Matt Ridley). 25. Who Broke Our Republic? -- Episode 163 of The Seen and the Unseen (w Kapil Komireddi). 26. The Economics of the Chilling Effect -- Episode 5 of Econ Central. 27. Facts Don’t Matter. Stories do -- Amit Varma (on Donald Trump & simple narratives). Do subscribe to The India Uncut Newsletter, Amit's new project. And pick up Bad Money, Vivek's bestselling book.

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Can loan moratoria thrive while NPAs rise? | The Hindu In Focus podcast

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Play Episode Listen Later Aug 1, 2020 30:20

To help people whose cash flows and incomes were suddenly disrupted by COVID-19 and the attendant lockdown, the Reserve Bank of India, back in March, announced a loan moratorium scheme. The scheme was initially for three months, from March to May. It was then extended for another three months, till August 31. Now, as we enter the last month of this extension, there is yet another round of debate on whether the moratorium scheme should get another extension, say, till December. So long as the moratorium is in place, and people aren't tested for their ability to repay, banks have no way to know how many more of their loans have gone bad. Should the moratorium be extended or not? What are the issues involved in either of the two options? What's at stake for the banks? What does it mean for the consumer? What does it mean for the economy? Guest: Vivek Kaul, columnist and personal finance expert, bestselling author of The Easy Money Trilogy and Bad Money: Inside the NPA Mess and How it Threatens the Indian Banking System. Find the In Focus podcast on Spotify, Apple Podcasts and Stitcher. Search for In Focus by The Hindu. Write to us with comments and feedback at socmed4@thehindu.co.in

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976: The threat of rising NPAs, 'Bhoomi Pujan' of Ram Temple, Railways ends dak messengers

3 Things

Play Episode Listen Later Jul 28, 2020 28:50

In the first segment, Udit Misra explains why experts are concerned about the rise of NPAs, how they will likely impact the economy, and what the government can do about it. Next, Maulshree Seth talks about the preparations underway for the ‘Bhoomi Pujan’ of the Ram Temple in Ayodhya and development projects that the UP government is planning to announce with it (14:28). And in the end, Iram Siddique talks about why the Railways is ending the ‘dak’ messenger system and how the COVID-19 lockdown has impacted it (20:10).

Short Covering Rally in Banking and Financial sector stocks

Market Updates By Stocksbaazigar

Play Episode Listen Later May 27, 2020 4:59

Today on 27th May 2020, Nifty closed above 9300+ levels thanks to rally in the Banking and Financial sector stocks. These stocks were already undervalued and under owned. Also,there is possibility that Government will infusing liquidity in Banking system by giving 1.5 Lac Crores worth package to help banks during Covid-19 times. Banks have more than 10 lac Crores of NPAs. Covid times will make its NPAs double. That's the reason Banking system needed support. Hope Government will ensure that Businesses keeps getting loans from banks to keep economy running. Thank you for listening to my podcast 'Market Updates by Stocksbaazigar'. Do add this podcast in your favorite list. Visit www.stocksbaazigar.com website for further details. Follow Stocksbaazigar on Twitter and Instagram. Subscribe to my Youtube channel 'Stocksbaazigar'. Like Page 'stocksbaazigar.com' for important updates,stocks ideas, personal Finance etc related things. Thank you once again.

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Bad bank may start with Rs 60K-crore NPAs; govt may put in Rs 10K crore

Business India

Play Episode Listen Later May 11, 2020 1:52

Bad bank may start with Rs 60K-crore NPAs; govt may put in Rs 10K crore

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30: Indian Markets end Lower as number of Covid-cases Rise

Mint Evening Market Wrap

Play Episode Listen Later May 7, 2020 4:47

The Indian stock markets closed-ended around 1% down on Thursday. The BSE Sensex ended at 31,470, down 215.68 points. The 50-share index Nifty closed a tad below 9200, down 71 points. Bluechip financial stocks contributed most to the stock market losses, due to the anticipated increase in NPAs or bad loans.

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Regression, Compensatory Education, & Quarantine

Making Special Education Actually Work

Play Episode Listen Later Apr 14, 2020 18:31

Photo Credit: Dan Gaken One of the many populations of individuals directly negatively impacted by the current quarantine is the special education population. Among those students are those whose impairments are significant enough that any significant disruption in their school routines will cause them to regress, which is to lose learning they had previously acquired. Regression happens for students such as these during lengthy breaks, like summer, which is why we give them Extended School Year (ESY). By extending the school year through periods of normal breaks, we prevent them from losing ground. When kids regress from disrupted instruction, once the instruction resumes, that time has to be spent on recoupment, which means re-teaching what was forgotten. That means time spent re-teaching previously known information instead of adding onto it with new information. For kids already behind in the first place, this puts them even further behind. Compensatory education can be used to make up for regression and can take different forms. Sometimes its intensive services over a summer break so the student is where they should have been by the time school starts back in the fall. Other times, it's supplemental services being provided outside of the regular school day in addition to the instruction being provided during school, though that can be pretty tough on a lot of kids. Sometimes, it takes putting the student into a more restrictive, but more intensive instructional placement for a period of time so they can catch up in their learning before being returned to the public school setting with services in place that will prevent them from regressing again. Compensatory services can be provided in other contexts, as well, regardless of whether regression has occurred or not. When families find it necessary to take their Local Education Agencies (LEAs) to due process to achieve remedies for the deprivation of educational benefits, compensatory education is the likely remedy, though the form it takes varies from case to case. From a procedural standpoint, if an IEP calls for a specified number of service minutes for a particular intervention and not all of those services minutes are provided as they should be, a minute-for-minute compensatory remedy is due simply as a matter of procedure. The regulatory procedures require that IEPs be implemented as written and, if they aren't, whatever services that weren't provided according to their mandatory statements of frequency and duration remain due to the student. An Individualized Education Program (IEP) is a legally binding contract that obligates LEAs to deliver on it as written, so if they don't, they have to make up the services minutes to which they committed themselves as described by the affected student's IEP. When compensatory minutes are ordered following a state-level compliance complaint or due process case on the basis of procedural violations, the compensatory services are minute-for-minute as described by the IEP because the number of service minutes the student should have received are documented in the IEP, which the LEA is legally obligated to implement as written as a matter of procedure. However, compensatory education can also be ordered by a judge in due process on the basis of substantively inadequate IEPs. In such instances, a student's IEP does not contain services that it should, so they can't be enforced as a matter of procedure. When necessary services are left out of an IEP such that the student suffers a deprivation of educational benefit, or when services in the IEP are not delivered as the result of a procedural violation and the student then regresses, now you're talking about substantive harm. Failing to follow the rules and owing something previously promised is one thing, but causing further loss of learning by failing to implement the IEP as written such that regression occurs is a much bigger issue. Failing to teach necessary instruction because it was left out of the IEP is just as big of an issue, if not bigger. When special education students are deprived of educational benefits by their LEAs, how much of what kind of services they get to make up for those deprivations has to be figured out on a case-by-case basis. Judges rely on expert testimony and evidence, usually assessment reports, to figure things out when these cases go to hearing. How well a student's attorney argues the case has a lot to do with how much compensatory education that student will get for any sustained allegations of substantive harm. Those are the basics of how and when compensatory education can be ordered. Compensatory education can also be negotiated as conditions of settlement to prevent any kind of regulatory and/or judicial intervention. I've even had situations in which procedurally owed compensatory service minutes are written into IEPs at IEP meetings without lawyers and lawsuits even coming up in the conversation. This latter action has usually occurred when there was a temporary lack of a qualified provider and the service minutes had to be made up once the position was filled. All of this is based on how things were before the quarantine and, at least for right now, no waivers of the Individuals with Disabilities Education Act (IDEA) have been authorized by Congress. Parents and educators are still waiting to find out if any waivers will be passed in the near future (sign our petition to ask Congress to not authorize waivers), but for now, the law still stands as it always has. Any child whose IEP is not currently being implemented as written, right now, is going to be owed compensatory minutes purely on the basis of procedure. If a kid's IEP calls for 30 minutes per week of speech/language services and that kid has been in quarantine for six weeks without those services, that kid is now due 180 minutes of back-due speech/language minutes, and that number will continue to grow for so long as that kid continues to go without those speech/language services. Dealing with procedurally required compensatory services along these lines is going to be burdensome enough on LEAs after people adjust to quarantine and new ways of doing things are put into place, as well as once the quarantine is over. Both state and federal education agency officials have already started talking about how they're going to tackle that. Dealing with kids who are due compensatory remedy because they were deprived of educational benefits during quarantine because necessary services weren't in their IEPs in the first place and/or they regressed in the absence of services that were written into their IEPs but not provided, is going to be a whole other thing that is likely to burden our due process mechanisms and take money out of the classroom, virtual or otherwise, to pay lawyers. The substantive compensatory education claims are going to be significant and the reality is that an ounce of prevention is worth a pound of cure. Compensatory remedies are never as effective as the instruction students receive as a matter of a Free and Appropriate Public Education (FAPE). For one thing, IEPs are based on present levels of performance when they are written. Those present levels establish where the student was performing at the time the IEP was written and the IEP goals target learning outcomes for a year down the road, relative to the baselines established by the present levels. When kids regress from lack of instruction, their present levels of performance move backwards, not forwards. When kids fail to learn for lack of appropriate IEP goals and, thus, a lack of appropriate IEP services, further deficits are induced on top of the deficits that were already there as a result of their disability. When these same kids sit at home not getting appropriate special education, they fall further behind and no amount of compensatory services will ever restore them to where they should have been had their services been appropriately provided in the first place. Many special education students were facing IEP implementation failures and/or poorly constructed IEPs before the quarantine. Now, many more are joining them in the "Deprivation of Educational Benefits Club," as they sit at home without adequate services to see their IEP goals met and/or without adequate IEP goals to drive the provision of necessary services. Further, because their learning environments have dramatically changed, many of these children now have new needs specific to learning at home that are not addressed by their IEPs. Behaviors in response to parents' attempts at instruction top the list. Parents without any kind of training in delivering specialized instruction are attempting to nonetheless do so without the support of behaviorists that would otherwise be provided to credentialed special education teachers. Most parents give up in exasperation because they have to decide between the lesser of two evils: behavioral regression or academic regression. Recoupment of academics is usually a lot easier to achieve than remediating a big behavior problem. Remediating a behavior problem requires the student to unlearn maladaptive strategies and replace them with adaptive ones that have to be taught. Remedial academics just involves new learning; kids generally don't have to unlearn something inaccurate, first. At worst, they'll have to be retaught something they learned previously but forgot, before they can pick up with new stuff, again. Parents who have the means, right now, are working their health insurance to get online speech/language services, consultations with specialists like Occupational Therapists (OTs), and online social skills groups. They are paying out of pocket for online tutors and classes to give their kids some kind of academic routine. Many of those out-of-pocket costs are going to be recoverable as a matter of compensatory education. There are two ways that compensatory education gets funded: If it is agreed-to or ordered first, it is provided thereafter at the expense of the LEA. Either the LEA pays for it directly or the parents pay for it and the LEA reimburses them, as agreed to by the parties or as ordered by the judge in due process. If it is not agreed-to or ordered first, parents pay out of pocket for the services, then request reimbursement after the fact. If that's the case, either their LEA will agree to reimburse them, usually via a confidential settlement agreement, or the parents will have to file for due process and prove to a judge that they had to pay out-of-pocket for the services because the LEA failed to provide them, they were educationally necessary, and their child would have likely regressed or otherwise been denied a FAPE without them. That's something that some families should seriously think about, right now. Not everyone is out of work. Not everyone is without resources. If savings or lines of credit can be used to provide services in the home, now, while waiting for the local LEA to get its act together, parents can sit on their reimbursement claims until the dust settles. Due process claims come with a two-year statute of limitations. A denial of a FAPE that began on March 1, 2020 will remain viable until February 28, 2022, for example. Families that have the means to privately fund what their children with special education needs are not currently getting should do so just because it needs to be done, regardless of whether they can recover those monies from their local LEAs or not. But, because the taxpaying public has already paid the LEAs to render a FAPE but they aren't, parents should still keep their receipts in case they are able to recover their out-of-pocket later. The focus should be on keeping your kids moving forward in their learning and preventing regression. You can worry about the money later, given that you've got two years to act on your reimbursement claims. However, for families that do not have the means to pay out-of-pocket for now, there is a tremendous need for immediate intervention. As LEAs scramble to come up with solutions, one that seems obvious to me but which might not occur to others is to open up the provision of related services by private providers that are not currently licensed as Non-Public Agencies (NPAs). There are more qualified providers that are not licensed as NPAs than there are providers that are licensed as such. The barriers to entry into the NPA arena are ridiculous and multitudinous, plus they get paid at Medicaid rates, which is usually less than what it costs to deliver the services, so providers can't keep their doors open by operating as NPAs. Most NPAs are also set up to do business with other agencies and private insurance, which offsets the shortfall created by their NPA business. In many states, becoming an NPA is more of a marketing expense to get the agency's name out there in front of people, build up a trusted reputation as a provider, and then dump the NPA status to carry on with private insurance and other agency contracts in exchange for payments that actually keep their doors open. While NPA licensing requirements may have been created to keep the sketchy people out, they actually achieve keeping most of the really good people out, too. Now is the time to reform that process so that we have more providers that can reach into the homes via whatever safe means possible of the special education students who are currently being denied a FAPE and regressing at this very moment. In-person services can be provided with adequate Personal Protective Equipment (PPE) and safety protocols. Not every special education student is able access instruction online. Those who can, should, but that still takes a lot of skill and expertise to facilitate. When you've got a kid at home with a parent refusing to participate and no in-home behavioral services to facilitate their participation, the parent sits there helpless as the parent/child relationship suffers and no learning occurs. By relaxing the NPA licensing rules and letting non-NPA providers that are otherwise qualified with the proper professional certifications, such as Speech-Language Pathologists (SLPs) and OTs who are medically certified, a great many students can still receive services at home who otherwise wouldn't due to LEA staffing limitations. The goals that were determined to be educationally necessary by each child's respective IEP team are still educationally necessary. The services determined necessary to see those goals met in a year's time are still necessary. The only thing that has changed is placement, and now IEP teams need to figure out how to deliver services in the current placement such that the goals are still met. This is the same line of inquiry every IEP team has to pursue when normally making placement decisions. Placement is driven by what learning environment is the Least Restrictive Environment (LRE) in which the services can be delivered such that the goals are met. That's best practices according to educational science, plus it's the law. Now that placement changes have been forced on everyone because of quarantine, it's time to back up the conversation to that point, again, where services necessary to see the goals met in the current placement have to be identified. That said, new goals may actually be needed to address how the student functions in the home learning environment. New evaluations may be needed to inform what those goals should look like. One thing is certainly clear from all of this: the next time the IDEA gets reauthorized, it will need to include language that describes how it will be implemented during a national crisis. The absence of any such language automatically puts LEAs out of compliance when disaster hits, which benefits no one; leaves students stranded without a contingency plan, deprived of a FAPE and actively regressing with each passing day; and creates compensatory education claims that will become a greater burden on the public education system than serving these students appropriately during a crisis in the first place.

Supply Chain audits

31 Days to a More Effective Compliance Program

Play Episode Listen Later Apr 10, 2020 8:04

In my last corporate position, my company was at the compliance forefront because we required compliance related audits for vendors in the supply chain. This was cutting edge in 2007-08. However, now an audit for adherence to compliance requirements has become a standard best practice in the management of business relationships with third-party vendors in the supply chain. In several settlements of enforcement actions through both DPAs and NPAs, in the 2012 FCPA Guidance and, most recently, in the 2019 Guidance, the DOJ made it clear that a best practices compliance program includes the right to conduct audits of the books and records of its suppliers to ensure compliance. Many companies have yet to begin their audit process for FCPA compliance on vendors in their supply chain. This is a missed opportunity from both the compliance perspective and greater business efficiency. Any organization which audits a business partner in its supply chain should consult with legal, audit, financial and supply chain professionals to determine the full scope of the audit and a thorough and complete work plan should be created based upon all these professional inputs. After an audit, an audit report should be issued. This audit report should detail incidents of non-compliance with the compliance program and recommendations for improvements. Any reported incidents of non-compliance should reference the basis, such as contractual clauses, legal requirement or company policies. Three key takeaways: Is your supply chain vendor committed to the audit process? Capture the data, analyze the data, report on the data. Supply chain audits are no longer cutting edge but are now simply best practices.

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Innovation strategy for your compliance program

31 Days to a More Effective Compliance Program

Play Episode Listen Later Mar 2, 2020 8:03

In this chapter, we will consider innovation in compliance from a variety of angles including artificial intelligence (AI) and computer technology (ComTech), structural innovations, tools and tactics and innovation in leadership. This will provide you a number of solid ideas you can use to move your compliance program forward. Begin by considering the starting point, which is an innovation strategy. In the most recent DPAs and NPAs issued by the DOJ they all include an element along the following strictures: The Company will conduct periodic reviews and testing of its anti-corruption compliance code, policies, and procedures designed to evaluate and improve their effectiveness in preventing and detecting violations of anti-corruption laws and the Company’s anti-corruption code, policies, and procedures, taking into account relevant developments in the field and evolving international and industry standards. This means that the DOJ expects innovation in your compliance program to keep up with evolving international and industry standards. This requires you to implement an innovation strategy. Three key takeaways: Both the DOJ and SEC expect innovation in your compliance program. Innovation in compliance should have a strategy going forward. The key is to demonstrate how the compliance innovation will benefit the business going forward. For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit this month’s sponsor Affiliated Monitors at www.affiliatedmonitors.com.

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Planning to subscribe SBI Cards IPO? Here's all you need to know

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Play Episode Listen Later Mar 2, 2020 5:11

Finally, the wait is over, the SBI Cards and Payment services (SBI Cards) IPO opens today. Unlike others of its kind, the subscription window for the IPO will remain open for 4 days, which will be from March 2 to March 5. The extra day has been given for smooth conduct of applications, considering the large portion reserved for retail investors. For subscription, separate share quotas have been set aside for six different categories of investors including anchor, qualified institutional buyers, non-institutional investors, retail, SBI shareholders and employees. But before we dig into the process and whether you should subscribe, here’s a quick brief on the SBI Cards IPO. SBI along with a private equity (PE) major Carlyle group offers about Rs 13 crore worth shares and a fresh issue of Rs 500 crore, through this IPO, planning to raise up to Rs 10,341 crore which will be used to strengthen the SBI’s capital base. In case you don’t know, SBI is the country’s second largest credit card company having 18 per cent market share in terms of cards outstanding, with 9.83 million credit cards outstanding as of November, 30, 2019 and Rs 1.03 trillion in total of credit card spends in fiscal 2019. The price band of each share is set between Rs 750 and Rs 755. The company has allotted nearly Rs 2,800 crore worth of shares to anchor investors ahead of its opening. A total of 36.7 million shares have been allotted to 75 anchor investors at Rs 755 apiece, the top-end of the IPO price band. The list includes sovereign funds belonging to the Singapore and Kuwait government, Fidelity, Nomura, BNP Paribas, GMO and Blackrock. So, should you subscribe to the offer? Well here’s what analysts recommend: Valued at nearly 43x P/E (trailing) and 41x (based on H1FY20 annualised EPS), analysts see the valuation of the credit card issuer as aggressive when compared with peers. They, however, believe that the stock commands the premium valuation given its strong financial track record, goodwill associated with its parent company, State Bank of India (SBI), and a strong distribution network. Nearly all of them have assigned it a ‘subscribe’ rating. Considering SBI’s dominant position in the credit card market and rising trend of digital payments and e-commerce, Brokerage firm Motilal Oswal recommend 'Subscribe' to the IPO. Also, the offer is valued at 12.6 times its FY20 estimated book value (on an annualised and fully diluted basis) and 45.8 times its FY20 estimated price-to-earnings. ICICI Securities says SBI Cards offers investment opportunity in a unique business model with strong profitability. Sustainability of higher business growth and strong return ratios justifies premium valuation for the business. Therefore, it recommends a SUBSCRIBE recommendation on the stock. Nirmal Bang explains low penetration in SBI customer base plus strong distribution means SBI Cards’ user base can continue to grow at historical growth rates of 27 per cent CAGR (over FY15-19). Besides, increased focus on EMI products can lead to loan book growing at an even faster pace. While asset quality has held up till now, a slowing economy and job losses can lead to an increase in non-performing assets (NPAs). And therefore it recommends applying for the issue and rates the IPO as ‘SUBSCRIBE’. And Geojit Financial Services recommends ‘SUBSCRIBE’ to the issue with a long-term perspective, considering the healthy business outlook of SBI with 35 per cent and 54 per cent CAGR in credit card spending and outstanding during FY17-FY19. SBI Cards total revenue increased 46 per cent CAGR and net profit grew 52 per cent CAGR during... To know more, listen to this podcast

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Gator Days

Sunrise

Play Episode Listen Later Feb 18, 2020 26:38

It’s “Gator Day” at The Capitol and University of Florida President Kent Fox will discuss taking over Florida Polytechnic, the backlash against higher education in the Legislature and his favorite FSU jokes. Also, on today’s Sunrise: — After passing new restrictions on abortion under the guise of parental rights, the Senate is facing another parental rights bill that’s working its way through committees that could force teachers and guidance counselors to out gay and lesbian students to their parents. — One of the Governor’s priorities this year is cutting through the red tape for occupational licenses issued by local governments. But a bill doing that has stalled in the Senate. — Despite a racy memoir and a history of sexually suggestive comments, Dr. Scott Rivkees is one step closer to being confirmed as the state Surgeon General. — More than 3.5 million Floridians cannot vote in next month’s presidential primary, because they’re not in either the Republican or Democratic Party. But these NPAs — no party affiliation — can still vote if they change their registration by the end of the day. — The latest from Florida man: A guy with a life-size Donald Trump cutout and a woman who took a bite out of a crime-fighter.

No, I won't

The Poet’s Ruse

Play Episode Listen Later Dec 26, 2019 0:49

NPAs keep piling up but Indian Govt. is obsessed with NPR and NRC. If implemented, we'd be asked to put papers to prove citizenship. Instead, I put my pen to paper.

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Episode 35 - Is the Indian banking system facing a major crisis

Nothing Millennial About Us

Play Episode Listen Later Oct 24, 2019 45:38

The Indian banking system is currently facing a severe crisis due to the bad loans that have been handed out in the last decade. NPAs have risen to uncomfortable limits, eroding the quality of capital. The shadow banking system ie the NBFCs are on the verge of collapse, as already seen in the case of IL&FS and DHFL. The decline in growth of GDP could be the tipping point in this delicate balance of our financial system.

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Yes Bank’s Fall, Zee’s Woes and Deferred Tax Assets (Ep-12)

Capitalmind Podcast

Play Episode Listen Later Oct 9, 2019 19:00

Host Deepak Shenoy (CEO) and Aditya Jaiswal discuss about Yes Bank – The “Kohinoor” of Rana Kapoor, pledging of shares by ZEE and deferred tax assets (DTAs) in the books of private and public sector banks. Deepak’s thoughts on Yes Bank (1:35) Cockroaches in Zee’s Books? (5:45) Deferred tax assets in the books of private and public sector banks (10:00) Read full transcript: https://www.capitalmind.in/2019/10/yes-banks-fall-zees-fall-and-deferred-tax-assets-ep-12/ Excerpts: 1. Deepak's thoughts on Yes Bank: Why should people continue to retain deposits with the Yes bank? The answer to this is two things First of all, the bank accounts itself don't show us the kind of panic that people seem to have in their heads the deposits seem relatively safe. And to that extent, you know, if you look at the numbers that they have their INR 58,000 crores in government bonds are the 2 lakh Crore in govt deposits, that's 25% straightaway or 30% early and then they have loans worth INR 2,30,000 crores, they have another you know 10,000 crores of cash with RBI they have another INR 5000 somewhere else. So, there is essentially about 75,000 crores of very, very liquid assets that they have. They have also told us that, you know we've still seeing certain amount of rationalization in their in their loans. Even if all the BB loans were to go to zero and their current NPAs are all supposed to go to zero, they would lose roughly 20-25,000 crores this would take you know eight quarters because RBI way gives them already quarters write them down, in those eight quarters they will generate INR12-13,000 crores of profits because they have other loans which are good, there is a potential another fund raise that will come up so, at max I think even if they were to take this extreme step of where all these loans go bad, the capital ratios will still be okay... "I don't think it's a great time for anybody to buy Yes bank stock, it's a lottery! But the chances of winning substantial amounts are very low. So I'm not really interested in the stock. I am, however, of the opinion that the deposits are safe." 2. Cockroaches in Zee's Books? (5:45) If you look at the FII holding of ZEE, about 47% of ZEE is held by FIIs, out of which the big guys that is anybody who owns more than 1% of Zee add up to only only 19%. So, the remaining 30% of ZEE holding (held by FIIs), is held by a lot of FIIs who have less than 1% shares. Who are these FIIs? Why are there so many of them? And how come they all own these tiny little percentages of ZEE? We don't know the answer to that... 3. Deferred tax assets in the books of private and public sector banks If you take the 22% tax regime, you can't use the deferred tax assets. Whenever you take an asset and say that as it is worthless now, because I'm going to the 22% tax regime and that tax regime does not allow me to take the deferred tax asset, I am immediately going to lose that amount...

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Andy Lazev & Mike Conte: The Hurdles of the Appraisal Industry

Deposit That

Play Episode Listen Later Oct 8, 2019 69:10

One of the most important things in business has always been relationships and people tend to forget how valuable they are.From 2009 to 2012, a lot of appraisal guidelines, rules and requirements were changed to make it harder for lenders and real estate professionals to do business.On today’s episode, I have four guests that share their vast, 40-year experience in the appraisal industry.Andy Lazev is the co-founder of Nationwide Property & Appraisal Services. As the CEO of Nationwide, Andy manages the technical and operations direction of the Company, providing strategic guidance on process and system development and the development of internal quality and compliance standards.Haley Freedman is a second-generation Certified General Appraiser, with 40 years of experience in the industry. Professional education includes numerous appraisal courses taught by the Appraisal Institute and the Society of Real Estate Appraiser. Haley has received several awards from employers and peers over the years and is regarded as a leader by many in the industry.Mike Moore has been in Lending and Lending services for his entire career. Spending his first five years as a loan officer for a top ten retail organization, he then moved to the vendor management department and eventually went on to run operations at multiple Appraisal Management Companies. Joining NPAS in April 2018, Mike has been focused on growing the sales and account management teams by 80% and rolling out new, innovative products to ensure NPAS maintains its position as a leader in the valuation space.So, listen to Episode 14 of Deposit That, an episode filled with valuable pieces of advice from people that know their business inside out.Questions I ask:How do you, personally, as an owner of a company maintain loyalty, where your core people have been there and they're loyal to you and they have your back? (12:49)Do you believe that technology is going to replace a lot of your staff at some point? (16:22)Should somebody who inherits a property or should somebody who is thinking about selling a property get a private appraisal before speaking to a realtor, in your opinion, or is it almost like, "Why do that"? (22:03)Are you looking to take on new clients as well, as far as mortgage companies, banks, and everything? Are you guys actively searching? (32:48)I'm sure since you've been around 40 years, you've been offered bribes, I'm sure many people have called up and said, "Hey, I need this valuation." How do you prevent the desperation from controlling the outcome? (50:58)How much weight do you put on a local expert appraiser or valuationist? (56:27)In your 40 years of experience, what's been the two toughest times for you in the appraisal world? (01:04:41)In both of you, gentlemen's opinion, what's one thing you would leave somebody with after hearing you guys speak or based on your experience in the business? (01:06:44)In this episode, you will learn:The hurdles with compliance in the appraisal industry. (18:38)Andy’s advice for you, to deposit in your memory bank. (37:54)The biggest mistakes that people make, when they’re giving estimate valuations of their property. (42:53)The flaws of Zillow. (44:30)How younger people get trained in the industry and how they learn to do business. (53:01)The biggest hurdle, from an appraisal standpoint, in today’s current economic environment. (58:02)Where the market is headed right now. (01:05:16)Connect with The Nationwide Property & Appraisal Services team:WebsiteAndy Lazev:LinkedInEmail: ala@onestopappraisals.comMike Conte:LinkedInEmail: mconte@onestopappraisals.comMike Moore:LinkedInEmail: mmoore@onestopappraisals.comHaley Freedman:LinkedInEmail: hfreedman@onestopappraisals.com See acast.com/privacy for privacy and opt-out information.

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Ep. 110: Putting Stock in the Market

The Pragati Podcast

Play Episode Listen Later Aug 28, 2019 78:30

What is happening in India's stock markets right now? How do the stock markets interact with the real Indian economy? Deepak Shenoy is on Episode 110 of The Pragati Podcast to help us make sense of what is happening in India right now. The Pragati Podcast is a weekly talkshow on public policy, economics and international relations hosted by Pavan Srinath. Deepak Shenoy is the Founder and CEO of Capitalmind, a Bangalore-based investment research and wealth management startup. If you have any questions or comments, write in to podcast@thinkpragati.com. Follow The Pragati Podcast on Instagram: https://instagram.com/pragatipod Follow Pragati on Twitter: https://twitter.com/thinkpragati Follow Pragati on Facebook: https://facebook.com/thinkpragati Subscribe & listen to The Pragati Podcast on iTunes, Saavn, Spotify, Castbox, Google Podcasts, AudioBoom, YouTube or any other podcast app. We are there everywhere. You can listen to this show and other awesome shows on the IVM Podcasts app on Android: https://ivm.today/android or iOS: https://ivm.today/ios, or any other podcast app. You can check out our website at http://www.ivmpodcasts.com/

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