Message From the Editorial Team
In an age when we keep on wondering if the world is flat or round ; whether an institution is too big to fail ; if hedging magnifies risk ; globalization makes the national economies separate by less than six degrees or not – a conference on systemic risk is more than timely ! Actually, once we had the idea, the invited speakers jumped up and asked us why no one had thought of this before! We wanted to bring out the proceedings of the deliberations and delays made us cry out loud if contagion would set in before our distinguished panelists’ observations reached the general public! This issue of Finance 360 brings the proceedings of the 2012 Annual Conference of the Union Bank Center for Banking Excellence at Great Lakes. The 2012 is the 3rd Annual Conference held under the aegis of the Center and with the world in turmoil and the central bankers turning out to be the new captains of the global economic ships in these turbulent times, we wanted to turn away from the “PIIGS” countries inwards and focus the spotlight on ourselves. In a country where the financial services sector is still dominated by public sector giants and government guarantees to their liability holders are a given, we wanted an insider’s view as to the central bank / regulator’s ability and preparedness to deal with an exogenous financial “tsunami”! Assumptions of infallibility can be a chimera in a country with a yawning gap in its current accounts; a falling currency; a rising fiscal deficit; a stubbornly high inflation rate immune to the gravitational pulls of a rising yield curve; an infrastructure sector groaning under unhealthy debt equity ratios and a complete lack of bipartisan agreement on how to accelerate economic growth. We the public have been lulled into a false sense of security as we confused ourselves between the willingness of the establishment to nationalize our economic pain with their ability to do so – and there in lies the central question of this debate - CAN we tackle systemic risk if God forbid, as Vitalstatistix used to say that the “sky falls on our heads “? So we bring you this lively discussion with the distinguished panelists on these burning issues. And our students have contributed with their insights on various macroeconomic and capital market issues which are topical and reflect the evolving views of learners. And to top it off, no finance magazine is complete without its share of graphs that show a snapshot of the world that has passed us by !
February 2013
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