Credit derivatives: international developments and lessons for India

Credit derivatives have been popular instruments for hedging of credit risks by banks and financial institutions. The notional value outstanding of credit default swap contracts, a type of credit derivative most in use, increased from US$6.4 trillion in December 2004 to US$57.89 trillion in December, 2007. However, this instrument, which was once ‘apple of the eye’ of market players, lost its sheen in the wake of the sub-prime crisis when it was perceived to have played a major role in igniting the crisis and spreading it across the global financial system. This article presents how this came about and the after thought of the regulators of developed countries in regulating these instruments. It then looks at what lessons India can draw from the experience of the Western nations before considering introduction of credit derivatives in the Indian markets.     

Debt problems,home‐leaving,and boomeranging: A register‐based perspective on economic consequences of moving away from parental home

This article analyses the development of financial problems after leaving one's parental home, and considers how financial problems are associated with likelihood of boomeranging (i.e., adult children returning to parental home). The 9‐year follow‐up study focused on a nationally representative sample of Finnish young people between the ages of 15 and 25 who moved out from their parental home between 2006 and 2009 (n = 9,196). The measure of debt problems was based on monthly data on debt enforcement, a legal matter which may bring serious consequences for the debtors. The primary within‐individual, longitudinal analyses showed that debt problems increased directly after leaving parental home. Education and family background were significant predictors of debt problems in the four years after leaving parental home. Early leavers had significantly more debt problems than later leavers. Debt problems were associated with a higher likelihood of moving back to parental home. The results imply that it is important to support economic decision‐making during early adulthood.     

The effectiveness of the ECB’s unconventional monetary policy: Comparative evidence from crisis and non-crisis Euro-area countries

During the European financial crisis, the European Central Bank implemented a series of unconventional monetary policy measures. We argue that these programs lowered the bond yield spreads of Euro-area countries. This hypothesis is tested using pooled OLS estimations and two different datasets: monetary policy event dummies and the purchase volumes of the Securities Markets Programme (SMP). Overall, we find significantly negative effects on bond yield spreads for both datasets, leading us to accept the hypothesis. While the OMT reduces the spreads of both crisis and non-crisis countries, LTROs and the lowering of the deposit rate to 0 percent are mainly effective in non-crisis countries. The SMP lowers the spreads of crisis countries, but it has the opposite effect on non-crisis countries. This converse effect is explained by the risk that increasingly accumulates on the ECB’s balance sheet through the SMP and that way constitutes a fiscal risk for non-crisis countries. The results are confirmed by pooled OLS estimations that measure the effect of unconventional monetary policy on central government debt.     

From Financial Repression to External Distress: The Case of Venezuela

Recent work suggests a connection between domestic debt and external default. We examine potential linkages for Venezuela, where the evidence reveals a nexus among domestic debt, financial repression, and external vulnerability. The financial repression tax (as a share of GDP) is similar to OECD economies, in spite of higher debt ratios in the latter. The financial repression “tax rate” is higher in years of exchange controls and legislated interest rate ceilings. We document a link between domestic disequilibrium and a weakening of the net foreign asset position via private capital flight. We suggest these findings are not unique to Venezuela.     

Hyperinflation in a small open economy with a fixed exchange rate: A post Keynesian view

This paper examines the emergence of hyperinflation in a small open economy with a fixed exchange rate from a post Keynesian perspective. Three variables play key roles: distributive conflict, external debt, and expectations about the exchange rate. First, we propose a short-run Kaleckian macro model. Then, we study the long-run behavior of the model by endogenizing the price level and foreign indebtedness. We conclude that the existence of expectations about the nominal exchange rate is crucial to explaining the emergence of hyperinflation.     

Putting ‘merchants of debt’ in their place: the political economy of retail banking and credit-based financialisation in Germany

Why did household debt in Germany not increase after the year 2000? This article offers a supply-side explanation for this deviant debt trajectory by tracing the historical evolution of retail banking in the German political economy. It argues that at the end of the 1990s and in the light of European Monetary Union, profitability issues and banking fragmentation became severe enough to interrupt the path towards credit-based financialisation as prevalent among other capitalist economies. These factors interacted with a traditional lack of tools and incentives for rapid credit expansion, even though they were renegotiated in the processes of financial liberalisation, internationalisation and innovation. By employing historical-qualitative as well as statistical evidence for the argument, the paper’s contribution becomes twofold. First, it introduces and conceptualises retail banking as a focal point in the analysis of national financial systems and their transformation. Second, it complicates the standard accounts of German non-financialisation and reveals the ‘contested’ character of financial reform.     

浅谈我国资产评估管理中存在的若干问题及相应对策

从经济学角度系统分析资产评估业现状及其存在的弊病，使之适应市场经济发展的要求，成为真正履行独立、客观、公正原则的，具有国际水平的社会中介服务行业。     

欧美债务危机对我国电子商务业的影响及策略探析

尽管欧美债务危机的肆虐使得我国电子商务业面临业务扩展受限,行业盈利率下降,融资困难等问题。但同时也为国内电子商务业提供了市场机会增加,转型意识得以提升,获得定向宽松政策扶持,海外投资和效益凸显等机遇。因此,国内电子商务业应积极通过转变发展方式,审慎选择融资渠道,提高非系统风险防范力度等措施实现自身又好又快发展。     

湖北地方政府投融资平台的风险与重构研究

在预期利率水平走高和货币政策转向稳健的背景下,湖北某些地方融资平台还本付息压力陡增,必须谨防资金链断裂,从而避免资金危机和风险的倒逼。地方投融资平台的清理重构的基础条件是建立清晰的地方资产负债表和多样性的融资模式,但最终取决于地方政府自觉放弃在过多领域的投资主导,唯如此,才能在属于自己的领域规范地完成融资任务。     

国债发行规模与GDP和财政支出的关系

国债作为政府筹集资金、缓解财政压力和实施宏观经济调控与现代金融管理的重要工具,适当的国债政策是实现财政政策和货币政策调控目标、促进经济增长的重要手段与保证。我国国债的发行对支持经济的发展起到了重要的促进作用。要优化国债结构,实现国债结构进一步的合理化,就需逐步扩大地方政府债券发行规模,规范国债市场运行,调整国债投资规模与方向,促进我国经济长期稳定发展。