Subprime Crisis… (Part II)

The sign of the busting of bubble started to show from the middle of 2006 with the transition of loan from ‘interest only’ and ‘teaser rates’ to regular payments. This coupled with increase in market interest rate led to doubling or even tripling of monthly repayments. Unable to pay the increased monthly repayments, borrowers began defaulting and surrendering their houses adding to the pile of inventory of unsold houses. Unsold inventory was up nearly 40% in sept ’06, around the time   when prices began to decline.

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Banking Sector Interconnectedness in India..

The latest Financial Stability Report for March ’18 released by RBI shows that interconnectedness of Indian Banking industry has come down considerably over last year. That is important to note since the rapid spread of contagion during financial crisis in 2008 was primarily due to the fact that the financial institutions in US had become highly … Continue reading Banking Sector Interconnectedness in India..

Analysing Amalgamation of BoB, Vijaya Bank & Dena Bank..

The amalgamation of Bank of Baroda, Vijaya Bank and Dena Bank announced yesterday comes more than a year after the last successful merger in the PSB space. It clubs two PSBs having less than 2% market share with a mid-sized bank to create the country’s third largest bank. However, there are still around ten PSBs … Continue reading Analysing Amalgamation of BoB, Vijaya Bank & Dena Bank..

Subprime Crisis – Ten Years On.. (Part I)

The subprime crisis has caught the global attention again, today marking the collapse of Lehman Brothers, ten years ago. The crisis remains a classic case study for the enormity and swiftness with which it unfolded. A brief attempt to revisit and simplify the complex issues involved..The genesis of the issue, paradoxically, lies in another crisis … Continue reading Subprime Crisis – Ten Years On.. (Part I)

US China Trade War – Understanding the Dynamics..

The tariff hike on some of the Chinese goods by US government has shown that Mr Donald Trump is serious about what he talked about during his election campaign. Even though he has been facing severe criticism for his protectionist trade policies, his point of view with regard to China needs to be understood properly. A brief attempt..

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India’s Balance of Payment.. (Part II)

While software services continue to get maximum attention, Business  services is also a sizeable segment and provide some useful insights. The segment reported exports of over $37 bn, less than software, but substantial nevertheless. In fact, its growth rate at 13% implies that it is not witnessing the kind of challenges software is going through. Further, … Continue reading India’s Balance of Payment.. (Part II)