Category Economy and Infrastructure

₹2,000 notes: Another Costly Mistake

The Reserve Bank of India’s (RBI) announcement of withdrawal from circulation of the ₹2,000 currency notes has caused much incredulity. Tamil Nadu Chief Minister M.K. Stalin quipped, “500 doubts, 1,000 mysteries and 2,000 blunders”, and Rajya Sabha member P. Chidambaram said, “Demonetisation has come full circle”. The Union government has distanced itself from the decision by letting the RBI announce it.

US Hit the Debt Ceiling: Rising Alarm to Budget Deficit

The US hit the debt ceiling of $31.4 trillion on January 19 and as early as June 1, the US government may run out of money to pay its bills if Congress does not raise or suspend the debt ceiling. US treasury secretary Janet Yellen reaffirmed that defaulting on the US debt obligation would be a “catastrophe” and would put into question Washington’s “global economic leadership”. The debt ceiling refers to the maximum amount of money the government can borrow to meet its financial obligations.

The US Dollar’s Enduring Strength: Separating Fact from Fiction

Recently, numerous articles have been written on the demise of the dollar. The argument is that China, the second largest economy after the US, is increasingly convincing the world’s largest suppliers of energy, including Russia, Saudi Arabia, Iran, and Venezuela, to trade in Chinese yuan. This, according to the commentators, will usher in the demise of the ‘petrodollar’. It would then be a matter of time before the US economy crumbles, they argue.
The name is bond, FinCat Bond Sense on AT1 bonds

The name is bond, FinCat Bond: Sense on AT1 Bonds

Recognise AT1 bonds as insurance, rather than pure debt. Once AT1 bonds are understood as insurance by a bank that is still a going concern, against a calamitous loss, the expectation that they should be bailed in only after equity is written off would disappear The high-decibel angst of investors in Credit Suisse’s Additional Tier 1 (AT1) bonds that were fully written off before selling the bank to rival UBS for $3.23 billion resonates with investors in Yes Bank’s AT1 bonds, who are currently litigating against such a write-off at the hands of the RBI-appointed administrator, before the troubled bank was transferred to State Bank of India.
The Unease of Doing Business with DMRC

The Unease of Doing Business with DMRC

Yet, a company owned by GoI and the government of Delhi, the Delhi Metro Rail Corporation (DMRC), is crushing EODB under the wheels of its growing fleet of world-class trains, in the most spectacular fashion possible If god has a competitor, even in a limited capacity, it is the Government of India. GoI combines in itself the trinity of creator, preserver and destroyer when it comes to ease of doing business (EODB).