Central Banks are the backbone of an economic system. Any fracture can create serious concerns for the financial future of the country. In recent years, there have been numerous articles raising questions about the credibility of central banks. This article focuses the basics of central banks with a strong focus on its relation with the financial crises.
Category: Banking Scandals
The Secret Passage to Swiss Banking
Switzerland remains one of the most stable economies across the world and has not been in conflict with another country since 1505. With strong political stability and high per capita income across the world, it has also managed to keep its unemployment rate low. With Basel having headquarters of Bank of International Settlements (facilitates cooperation among the world’s central banks), Switzerland is considered one of the biggest tax havens in the world. The offshore accounts with Swiss banks have partial or full exemptions depending on the private bank. The country implements an extremely high level of secrecy when it comes to disclosure of financial assets of its clients.
Banking Industry has evolved tremendously over a period of time. Nowadays, modern banking sector is doing away with its traditional methods and shifting focus to a more advanced and digitally connected network. While many countries are still struggling to get basic banking facilities, there are others that are growing not only in number but facing fierce competition from non-banks. As we all know, banking, in recent years, is not all about depositing and taking loans but much more.
A Second Financial Crisis – are we in denial?
Six years of the financial turmoil has given a reason for many debates, research, arguments, discussions and even research work to many. To many nothing has really changed, in fact to them, we might be looking at something more serious in 2015. The question that is important is whether there is any truth to the occurrence of second financial crisis or are we just in denial?
The World Economy in 2015
The Failing Pulse of Japan
On October 30, 2014 Paul Krugman wrote in New York Times ” Japan used to be a cautionary tale, but the rest of us have messed up so badly that it almost looks like a role model instead.” Japan’s economy has been in coma for the past 20 years and its revival has been the focus of many debates and case studies (and many criticisms). With promising reforms like Big Bang and Abenomics, it is important to check whether Japan has overcome some hurdles or whether the reforms proved to be a complete failure.
The Biggest Banks, Bailouts & Basel III
The Financial Ripple (2007 – 2013)- As It Happened
The ripple effect of the financial downturn spread across nations from 2007. The intensity of financial shock from US Subprime Mortgage Crisis was so large that it caused Europe to witness a falling economy. Through out 2009 till 2013 Eurozone has been facing a fluctuating economy causing serious concerns over rising unemployment and failure to revive the sleeping economy. In 2013, Asia Pacific faces serioius concerns with China, Japan & India falling slowly in the financial trap.The falling rupee, tumbling asian stock markets and a high food inflation are causing grave concerns over asian economies.
Too Big to Fail or Too Small to Succeed!
‘Too Big to fail’ is a clear concept asserting that certain financial concerns are too large and well connected to fall apart and incases when this occurs the government should step in to bail them out.But does it hold true in all cases?A small write up on how this issue is big and ways to get it right.
Banking on Thin Ice !
A bank failure leads to an economic failure and in the past many similar failures have been faced all across the world but lessons are yet to be learnt. The recession of 2007-2013 is difference from previous depressions and bank failures simply because we are more globally connected and products like currency derivatives have just made banking across the world globally connected. This article looks at the Central banking system, focuses on shadow banking and breezes through the issue of systemic risk.
The Eurozone’s Austerity Obsession
A small focus on what Austerity is about and how Portugal is facing hard times after Greece and Ireland. Different economists have different analysis to make but traditional theories remain intact and this world meltdown seem to be questioning some theoretical approaches towards a more practical world.
The Base-ics of Basel
According to the BIS, “The choice of Switzerland for the seat of the BIS was a compromise by those countries that established the BIS: Belgium, France, Germany, Italy, Japan, the United Kingdom and the United States. When consensus could not be reached on locating the Bank in London, Brussels or Amsterdam, the choice fell on Switzerland. An independent, neutral country, Switzerland offered the BIS less exposure to undue influence from any of the major powers. Within Switzerland, Basel was chosen largely because of its location, with excellent railway connections in all directions, especially important at a time when most international travel was by train.”
Britain’s ‘QUIET’ Fallout!
According to PwC’s report, UK will see a slip in its GDP’s ranking to 11th position in the world’s rankings. US, Japan, Germany, France and Italy has also been pushed down the league table but only UK and Italy lost out on the top ten slot. The same reports also predicted that China will soon overtake United States as the world’s largest economy in 2017. UK at present faces many issues that are being addressed but are they quick enough to make instant changes in the nation’s economy?