The enormous growth of OTC derivatives contributed to tightening the links among financial institutions, making contagion more likely in case of failure of one of these institutions. Given the high market concentration in some of the OTC derivative space like FX, the risks that OTC derivatives pose to financial stability are therefore exacerbated. The opacity of OTC derivative markets amplifies the risk because activities of financial institutions cannot be fully observed by regulators and other market participants. There is a need to move these products to a more regulated and transparent, centrally cleared Exchange traded mechanism. Hence ensuring efficient, safe and sound Exchange Traded derivatives will be one of the main tasks of regulators. Safeguarding financial stability might come at a cost in terms of market efficiency, but measures for increasing safety can also improve market efficiency.
How about hearing this out from the experts? Catch the thought leaders speak on this and much more on 16th January 2010 at “Future of Financial Market Summit” at Goa.
Tuesday, December 29, 2009
Role of Banks in Development of Financial Markets
In the times of Global financial crisis, we have been a testimony to the fact that Indian Banking is relatively robust and it was able to sustain itself in all this turmoil. But can we afford to be complacent? Or should we be initiating preventive measures to safeguard against such crisis in the future?
The objective of the Indian Banks is to create deep and efficient financial markets based on strong fundamentals. Banks are now focusing on product innovation and ways of increasing liquidity in the markets, especially the rural sector. We have seen in recent times that the Central Bank has made money market operations more flexible, reduced banks’ capital reserve ratio and also eased rules for some foreign borrowing. Plans to introduce new instruments in the money market and the G-sec market are also on the horizon. The RBI has already permitted banks to take trading positions in Interest Rate Futures(IRFs). Being exchange traded, it is transparent and ensures better price discovery . Currently, we are in a very interesting phase and it would be exciting to know the new initiatives our Banking system is contemplating. The path breaking FOFM 2010 Summit, where all the financial market leaders congregate, will be an exciting opportunity to know the plans, the agenda, the roadmap, and concisely, to know what is store for Indian Economy..
The objective of the Indian Banks is to create deep and efficient financial markets based on strong fundamentals. Banks are now focusing on product innovation and ways of increasing liquidity in the markets, especially the rural sector. We have seen in recent times that the Central Bank has made money market operations more flexible, reduced banks’ capital reserve ratio and also eased rules for some foreign borrowing. Plans to introduce new instruments in the money market and the G-sec market are also on the horizon. The RBI has already permitted banks to take trading positions in Interest Rate Futures(IRFs). Being exchange traded, it is transparent and ensures better price discovery . Currently, we are in a very interesting phase and it would be exciting to know the new initiatives our Banking system is contemplating. The path breaking FOFM 2010 Summit, where all the financial market leaders congregate, will be an exciting opportunity to know the plans, the agenda, the roadmap, and concisely, to know what is store for Indian Economy..
Wednesday, December 23, 2009
The case of financial reforms in India and emerging markets
How does India fare in terms of overall financial depth?
Over the years, the growth of Indian market has attained a high benchmark to sustain the business and competition with other nations. From the early 1990s, Indian economy has been following a liberalized policy, by reducing government restrictions on foreign trade and investment. After lumbering along at a pace of about 4–5% GDP growth a year in the last couple of decades, the economy has surged in this decade, posting an average annual growth of 8.5 percent since 2005.
However, one needs to look at how does India fare in terms of overall financial depth and the size of the financial system relative to the economy? It does not fare as well as compared to most other emerging markets at a similar stage of development. Despite the apparent strength of the banking system, the ratio of private sector credit to GDP is still low by international standards.
While India’s financial institutions and regulatory structures have been developing gradually, the time has come to make a more concerted push towards the next generation of financial reforms. Considering its greater integration with global trade and finance, does this call for deeper, more efficient and well-regulated financial markets? Does the situation demand financial inclusion reforms to pool in the savings of a humungous populace towards economic development? Will broadening and deepening of financial markets answer these questions?
The answers lie in the minds of the best minds in the domain. And what could be more interesting than having them discuss this on a common platform.
Come January 15th , catch this and much more at the “Future of Financial Markets” event in Goa.
Over the years, the growth of Indian market has attained a high benchmark to sustain the business and competition with other nations. From the early 1990s, Indian economy has been following a liberalized policy, by reducing government restrictions on foreign trade and investment. After lumbering along at a pace of about 4–5% GDP growth a year in the last couple of decades, the economy has surged in this decade, posting an average annual growth of 8.5 percent since 2005.
However, one needs to look at how does India fare in terms of overall financial depth and the size of the financial system relative to the economy? It does not fare as well as compared to most other emerging markets at a similar stage of development. Despite the apparent strength of the banking system, the ratio of private sector credit to GDP is still low by international standards.
While India’s financial institutions and regulatory structures have been developing gradually, the time has come to make a more concerted push towards the next generation of financial reforms. Considering its greater integration with global trade and finance, does this call for deeper, more efficient and well-regulated financial markets? Does the situation demand financial inclusion reforms to pool in the savings of a humungous populace towards economic development? Will broadening and deepening of financial markets answer these questions?
The answers lie in the minds of the best minds in the domain. And what could be more interesting than having them discuss this on a common platform.
Come January 15th , catch this and much more at the “Future of Financial Markets” event in Goa.
Tuesday, December 22, 2009
Opportunities with a Multi-Asset Exchange in an International Financial Centre”
Today the global international financial services (IFS) market is one in which competition is driven by rapid innovation in financial products, services, instruments, structures, and arrangements to accommodate and manage myriad requirements, risks and a ceaseless quest for cost reduction. Most financial services are now tradable across borders in an extremely competitive environment with buyers and sellers around the world having a choice of procuring services from competing international financial centres.
Although building a multi-asset trading platform seems to be a very complex undertaking, especially when dealing with multiple geographies, market structures, asset classes, and time zones, there has been consistent development in this direction ensuring better opportunities in Creation of trade automation tools , Evolution of multi-asset algorithms, Cross –asset trading.
Further, shall these opportunities be realized by firms who “get it right” the first time or these benefits will reflect eventually is an interesting point to be discussed.
Get yourself introduced to one of the many such interesting discussions @ “Future of Financial Markets Summit 2010 “ to be held in Goa on 14th Jan – 17th Jan 2010. You can also be connected to discussions and forums on most buzzed financial markets issues at www.fofm.in
Although building a multi-asset trading platform seems to be a very complex undertaking, especially when dealing with multiple geographies, market structures, asset classes, and time zones, there has been consistent development in this direction ensuring better opportunities in Creation of trade automation tools , Evolution of multi-asset algorithms, Cross –asset trading.
Further, shall these opportunities be realized by firms who “get it right” the first time or these benefits will reflect eventually is an interesting point to be discussed.
Get yourself introduced to one of the many such interesting discussions @ “Future of Financial Markets Summit 2010 “ to be held in Goa on 14th Jan – 17th Jan 2010. You can also be connected to discussions and forums on most buzzed financial markets issues at www.fofm.in
Saturday, December 5, 2009
Global Financial Markets Road Ahead
The Financial Markets have witnessed one of the most widespread recession and slowdown, quite different from the previous financial meltdowns in its impact and magnitude. A year later, we are on the track of recovery fuelled by the harmonic pumping of liquidity by the Federal Reserves across the nations and other corrective measures to restore normalcy. Economic recovery and the resulting increased risk appetite is a serious concern which worries the “Ben Bernanke’s” of every nation. Besides the new issues arising, the causes of the crisis: Moral Hazard, De-regulation, Risk Mispricing also need detailed attention. Future of Financial Markets Summit (FOFM II) seems to be a promising platform for answers to these questions through the “Global Financial Markets Road Ahead” discussion on 15th Jan 2010.
Future of Financial Markets Leadership Summit 2010
The Future of Financial Markets Leadership Summit 2010 (FOFM 2010), to be held from 14th January -17th January2010 in Goa, intends to be a platform for financial market leaders from around the world to network, cooperate and exchange ideas on key issues and challenges in the development of financial markets. The summit has been structured to stimulate dialogue amongst market participants of the global financial community—regulators, stock and commodity exchanges, media, banks, policy makers and other influencers—on new perspectives that will promote stability in the financial system and the new world economic order.
The theme for 15 January, Friday, is “Emerging Markets” with spotlight on the fast growing economies of Middle East, Africa and Asia, including India.
The theme for 16 January, Saturday, is “Enabling Growth” encompassing tracks on various asset classes such as equity, commodity, fixed income and currency, and market participants such as exchanges, banks, investors and analysts.
Catch the build-up to the event on the FOFM website
The theme for 15 January, Friday, is “Emerging Markets” with spotlight on the fast growing economies of Middle East, Africa and Asia, including India.
The theme for 16 January, Saturday, is “Enabling Growth” encompassing tracks on various asset classes such as equity, commodity, fixed income and currency, and market participants such as exchanges, banks, investors and analysts.
Catch the build-up to the event on the FOFM website
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