✌✌✌✌ THE HINDU ✌✌✌✌
✌✌ Managing risk in banks ✌✌
The Reserve Bank of India’s biannual Financial Stability Report has once again flagged the fact that risks to the banking sector remain worryingly “high”. That the risks have stayed “elevated due to continuous deterioration in asset quality, low profitability and liquidity,” in the central bank’s assessment, is cause for concern. Given the central role commercial lenders have in the financial system — serving to harness public savings and direct the flow of crucial credit to the most productive industrial and infrastructure sectors — any systemic risk to the banking industry has the potential to ripple across the entire economy. There has been no perceptible improvement in the health of domestic banks, even six months after the RBI’s previous report had highlighted the sector’s high vulnerability on account of the increase in capital requirement and worsening asset quality, spotlighting the need for urgent policy interventions. Some measures have been initiated and others are in the pipeline, including a draft Financial Resolution and Deposit Insurance Bill to address bankruptcy situations in banks and other financial entities. Still, there is every reason to prioritise the restoration of the sector’s health as some of the risks inherent in banks may already be getting transferred to other segments of the financial markets, according to the RBI’s report. A survey, of experts and market participants, conducted by the RBI in October-November reveals that among institutional risks, credit growth and cyber risk were seen as two key “high risk factors”.
The appointment of Viral Acharya as Deputy Governor overseeing monetary policy at the RBI, therefore, comes at a crucial juncture. A former member of the Advisory Committee of Financial Sector Legislative Reforms Commission, he brings substantial expertise in both identifying and dealing with systemic risks in the banking sector. Having authored a number of papers on the risks lenders could pose to the wider financial system and even the sovereign’s credit standing, he will have his task cut out. A proponent of sequestering and separately dealing with the stressed assets and bad loans on a lender’s books, Mr. Acharya had in an interview suggested that the “unhealthy parts of the troubled banks” could be separated from the healthier assets and put into a ‘bad bank’ to prevent systemic contagion. With the RBI pointing out that banks saddled with bad loans were likely to remain “risk-averse” and find themselves lacking the capital needed to lend more to meet credit demand in the economy, the regulator and the government will need to work in close concert to expeditiously resolve this vital legacy issue.
✌✌ A new dawn for Syria? ✌✌
The ceasefire reached between Syria’s government and Opposition, with the mediation of Turkey, Russia and Iran, could be a turning point in the country’s civil war. Unlike the two previous failed ceasefires this year — which were negotiated between Russia and the U.S. — the latest one is sponsored by countries directly involved in the conflict. The positive reaction from both the Syrian regime and rebel commanders to the announcement of the ceasefire by Russian President Vladimir Putin also suggests that the warring parties are willing to give diplomacy a chance. For the Syrian government, this is an opportunity to announce it is ready for a peaceful settlement. Though President Bashar al-Assad has repeatedly claimed that he would retake the entire territory from the rebels, a military solution appears to be illusory. A prolonged conflict will exhaust the regime forces further and multiply the humanitarian costs. On the other side, after the victory in Aleppo, the regime could now negotiate with the rebels from a position of strength. For the rebels, the momentum is gone. Their support is limited to certain parts such as Idlib, Daraa and the outskirts of Damascus. The question they face is whether they should continue fighting a never-ending war of attrition or seek to gain leverage from whatever military influence they are left with.
There is a convergence of interests for Turkey and Russia in finding a peaceful solution. Having seen the U.S. interventions in Iraq and Afghanistan, Russia doesn’t want to get stuck in Syria. By promoting a negotiated deal, it could retain its core interests in Syria while at the same time projecting itself as a power broker in West Asia. Turkey wants to limit the spillover effects of the war on its soil and stop Kurdish rebels from capitalising on the chaos in Syria. This explains why Turkey and Russia have come together now despite their bitter relations last year. But these objective conditions alone may not produce sustainable peace. It is still not clear which rebel groups have agreed to the ceasefire. Turkey supports only some of the rebel groups, while several other groups get support from Gulf monarchies. There are jihadist elements as well in the Opposition, such as Fateh al-Sham, that could play the spoiler by carrying out attacks on government positions. Besides, the Kurdish question remains unaddressed. If Kurds are invited for talks, Turkey might withdraw its support for the peace process. For now, however, if the ceasefire holds at least till next month’s Astana summit of the related parties, it could be a new beginning for Syria.
✌✌✌✌ THE ECONOMIC TIMES ✌✌✌✌
✌✌ The Yadavs fight to delight BSP and BJP ✌✌
One day after the chief minister of India’s smallest state was suspended by his own party, it is the turn of the chief minister of the largest state to get expelled from his.
Pema Khandu’s predicament might or might not be a speed-breaker in the BJP’s all-conquering march in the northeast, but Akhilesh Yadav’s expulsion from the Samajwadi Party will have a decisive impact on national politics.
The split in the Yadav clan will weaken the Samajwadi Party ahead of the forthcoming UP elections and strengthen the hands of the BSP and of the BJP. Even the Congress now stands to get a chance to show that it is something more than an ISI stamp of secularism. Akhilesh’s rebellion is more than a clash of personalities.
His father Mulayam Singh — who backs his brother Shivpal Singh against Akhilesh — represents the old brand of identity politics, which believes that caste/community solidarity is the only operative element in electoral arithmetic.
Akhilesh Yadav’s expulsion from the Samajwadi Party will have a decisive impact on national politics.
Akhilesh holds another view, that a commitment to growth and development is what people want and will support.
Endorsing criminals just because they belong to the group you wish to consolidate is not acceptable to this vision of politics. The emergence of this strand of thought is welcome from a broader perspective, but will weaken the Samajwadi Party in the short term, even if father and son patch up tomorrow.
Muslim voters cannot count on the SP to block the BJP’s ascendance in UP any more.
They are likely to transfer their votes to whichever non-SP candidate stands a better chance of defeating the BJP nominee in any given constituency. The BSP would be the biggest gainer, but the Congress would get these votes in some places. How people assess demonetisation would determine the BJP’s fate.
✌✌ Managing risk in banks ✌✌
The Reserve Bank of India’s biannual Financial Stability Report has once again flagged the fact that risks to the banking sector remain worryingly “high”. That the risks have stayed “elevated due to continuous deterioration in asset quality, low profitability and liquidity,” in the central bank’s assessment, is cause for concern. Given the central role commercial lenders have in the financial system — serving to harness public savings and direct the flow of crucial credit to the most productive industrial and infrastructure sectors — any systemic risk to the banking industry has the potential to ripple across the entire economy. There has been no perceptible improvement in the health of domestic banks, even six months after the RBI’s previous report had highlighted the sector’s high vulnerability on account of the increase in capital requirement and worsening asset quality, spotlighting the need for urgent policy interventions. Some measures have been initiated and others are in the pipeline, including a draft Financial Resolution and Deposit Insurance Bill to address bankruptcy situations in banks and other financial entities. Still, there is every reason to prioritise the restoration of the sector’s health as some of the risks inherent in banks may already be getting transferred to other segments of the financial markets, according to the RBI’s report. A survey, of experts and market participants, conducted by the RBI in October-November reveals that among institutional risks, credit growth and cyber risk were seen as two key “high risk factors”.
The appointment of Viral Acharya as Deputy Governor overseeing monetary policy at the RBI, therefore, comes at a crucial juncture. A former member of the Advisory Committee of Financial Sector Legislative Reforms Commission, he brings substantial expertise in both identifying and dealing with systemic risks in the banking sector. Having authored a number of papers on the risks lenders could pose to the wider financial system and even the sovereign’s credit standing, he will have his task cut out. A proponent of sequestering and separately dealing with the stressed assets and bad loans on a lender’s books, Mr. Acharya had in an interview suggested that the “unhealthy parts of the troubled banks” could be separated from the healthier assets and put into a ‘bad bank’ to prevent systemic contagion. With the RBI pointing out that banks saddled with bad loans were likely to remain “risk-averse” and find themselves lacking the capital needed to lend more to meet credit demand in the economy, the regulator and the government will need to work in close concert to expeditiously resolve this vital legacy issue.
✌✌ A new dawn for Syria? ✌✌
The ceasefire reached between Syria’s government and Opposition, with the mediation of Turkey, Russia and Iran, could be a turning point in the country’s civil war. Unlike the two previous failed ceasefires this year — which were negotiated between Russia and the U.S. — the latest one is sponsored by countries directly involved in the conflict. The positive reaction from both the Syrian regime and rebel commanders to the announcement of the ceasefire by Russian President Vladimir Putin also suggests that the warring parties are willing to give diplomacy a chance. For the Syrian government, this is an opportunity to announce it is ready for a peaceful settlement. Though President Bashar al-Assad has repeatedly claimed that he would retake the entire territory from the rebels, a military solution appears to be illusory. A prolonged conflict will exhaust the regime forces further and multiply the humanitarian costs. On the other side, after the victory in Aleppo, the regime could now negotiate with the rebels from a position of strength. For the rebels, the momentum is gone. Their support is limited to certain parts such as Idlib, Daraa and the outskirts of Damascus. The question they face is whether they should continue fighting a never-ending war of attrition or seek to gain leverage from whatever military influence they are left with.
There is a convergence of interests for Turkey and Russia in finding a peaceful solution. Having seen the U.S. interventions in Iraq and Afghanistan, Russia doesn’t want to get stuck in Syria. By promoting a negotiated deal, it could retain its core interests in Syria while at the same time projecting itself as a power broker in West Asia. Turkey wants to limit the spillover effects of the war on its soil and stop Kurdish rebels from capitalising on the chaos in Syria. This explains why Turkey and Russia have come together now despite their bitter relations last year. But these objective conditions alone may not produce sustainable peace. It is still not clear which rebel groups have agreed to the ceasefire. Turkey supports only some of the rebel groups, while several other groups get support from Gulf monarchies. There are jihadist elements as well in the Opposition, such as Fateh al-Sham, that could play the spoiler by carrying out attacks on government positions. Besides, the Kurdish question remains unaddressed. If Kurds are invited for talks, Turkey might withdraw its support for the peace process. For now, however, if the ceasefire holds at least till next month’s Astana summit of the related parties, it could be a new beginning for Syria.
✌✌✌✌ THE ECONOMIC TIMES ✌✌✌✌
✌✌ The Yadavs fight to delight BSP and BJP ✌✌
One day after the chief minister of India’s smallest state was suspended by his own party, it is the turn of the chief minister of the largest state to get expelled from his.
Pema Khandu’s predicament might or might not be a speed-breaker in the BJP’s all-conquering march in the northeast, but Akhilesh Yadav’s expulsion from the Samajwadi Party will have a decisive impact on national politics.
The split in the Yadav clan will weaken the Samajwadi Party ahead of the forthcoming UP elections and strengthen the hands of the BSP and of the BJP. Even the Congress now stands to get a chance to show that it is something more than an ISI stamp of secularism. Akhilesh’s rebellion is more than a clash of personalities.
His father Mulayam Singh — who backs his brother Shivpal Singh against Akhilesh — represents the old brand of identity politics, which believes that caste/community solidarity is the only operative element in electoral arithmetic.
Akhilesh Yadav’s expulsion from the Samajwadi Party will have a decisive impact on national politics.
Akhilesh holds another view, that a commitment to growth and development is what people want and will support.
Endorsing criminals just because they belong to the group you wish to consolidate is not acceptable to this vision of politics. The emergence of this strand of thought is welcome from a broader perspective, but will weaken the Samajwadi Party in the short term, even if father and son patch up tomorrow.
Muslim voters cannot count on the SP to block the BJP’s ascendance in UP any more.
They are likely to transfer their votes to whichever non-SP candidate stands a better chance of defeating the BJP nominee in any given constituency. The BSP would be the biggest gainer, but the Congress would get these votes in some places. How people assess demonetisation would determine the BJP’s fate.
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