Currency futures liquidity ahead of the forward market?

At NSE, currency futures did $1.8 billion yesterday. With this, India is starting to look like a rare country where the turnover of the currency futures market is big when compared with the currency forward market. (Gurnain pointed out, in the comments to this post, that this is the case in Brazil. I'm not aware of any other country where this is the case).Turnover is, of course, not liquidity. An exchange can fake liquidity by doing round-trip transactions...

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Interesting readings

Writings about Lehman, in the broad Indian discourse, are a reminder of the low quality of the Indian economics discourse. Meghnad Desai looks back at a year after Lehman, in Financial Express. For a person who was in my father's class at M.A., he is remarkably free of socialist cobwebs of the mind. And, for other interesting treatments, see : see: Jayanth Varma in Financial Express, Dhiraj Nayyar in Indian Express, Andy Kessler in Forbes, Avinash Persaud on bankers pay in Financial Express....

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You will

In 1993, before the World Wide Web and before the commercial Internet, AT&T ran a set of television advertisements. They are visible on youtube. At first blush, a lot of it sounded wide eyed and futuristic. But to people who were in the field then, everything in the ad was reasonable and incremental; merely a matter of scaling up what had been figured out. It was a great time to be alive, those early days of the Net. To AT&T iphone customers of today in the US, almost everything in the ad is now reality.A more gloomy version...

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5th research meeting of the NIPFP-DEA Research Program - website is up

The bulk of the papers and slideshows in the 5th Research Meeting of the NIPFP-DEA Research Program are now up on the website. (A few stragglers are still trickling i...

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Interesting readings

Editorials in Financial Express and Indian Express in response to Dr. Subbarao's recent major speech about the role and function of RBI. And here is another interesting speech by Dennis Lockhart of the Federal Reserve Bank of Atlanta. On voxEU, Tao Sun and Xiaojing Zhang talk about China's deepening de facto openness and its consequences for policy. In parallel with the slow Indian policy evolution towards Indian Depository Receipts (IDRs), Kathrin Hille has a story about China moving towards having foreign...

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5th research meeting of the NIPFP DEA Research Program

The program is up on the website. This will be on 16 and 17 Septemb...

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Interesting readings

Ila Patnaik on the claims that the world now has something to learn from RBI on how to do financial regulation. Jason Zweig in Wall Street Journal on data mining bias. I always find it amusing that to the computer software industry, `data mining' is not a loaded phrase. Footage about Bombay of 1932. Watch Gautam Bhardwaj and Lant Pritchett on Ila Patnaik's TV show. A. Seshan in Hindu Business Line on RBI's conflicts of interest. Monika Halan in Mint on inflation indexed bonds. In Financial...

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The scope of central bank independence, and the accountability mechanisms that go with this

I have a column in Financial Express today on the rationale for independence of the central bank, and how this is operationalised in democraci...

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How useful are the new interest rate futures?

The path to interest rate futures was afflicted by important mistakes in policy. I wrote a piece in Financial Express today about how, ironically, the damage caused by these mistakes is smaller than meets the eye, given that we have a stunted bond market in the first pla...

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Corporations and OTC derivatives

Central counterparty for OTC derivativesJayanth Varma is astounded that some corporate treasurers think that their derivatives positions should not be backed by collateral. I am too. On a related track, there is news today that RBI is pushing banks to report interest rate swap transactions through CCIL. This is in the right direction.The futures clearing corporation as the role modelThe role model here is the futures clearing corporation, e.g. NSCC. Futures clearing corporations are designed to enable safe trading between...

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Accessing CMIE data for the time-series of market shares and Herfindahl index for a given industry

For over 20 years, CMIE has computed `market shares' of the companies who compete in a certain product. They have also computed the Herfindahl index of concentration. This data is valuable in obtaining a snapshot of what is happening in an industry. But more interesting, this data goes back to 1990-91, and thus constitutes a valuable historical series using which we can obtain insights into individual industries and the economy. I often get asked how this information base can be accessed, other than by going through print documents...

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