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Wednesday, December 23, 2009

Interesting readings


  1. Ashok desai's article raised a lot of questions. He does not talk about prepayment risk in his article about high prepayment penalties. For floating rate loans, future higher interest rates will increase prepayment rates. Vice versa for fixed rate loans.
    I wonder how much indian banks hedge their loan portfolios against things like prepayment. It would reduce the exorbitant prepayment penalties atleast to some extent?
    Also noticed that ICICI charges something like 1.75% to convert from floating to fixed or vice versa. I wonder why its so high! Also, raises doubts about whether the fixed rate is fair compared to a swap. Can one find info on Indian IR swap rates (OTC?) anywhere?

  2. The NYT article only talks about LUMS. Where is the comparison of LUMS vs ISB?

  3. Nice information on gst in india. For more updates please see my site

  4. The progress of UPA II in financial reforms has indeed been disappointing. So in the two sessions so far what has been legislated upon?

  5. Swami’s statement that India's big advantage lies not in cheap labour but in cheap design and engineering skills was very interesting. We do not have cheap labour because the government does not allow it. If labour mobility was allowed along with hire and fire we would potentially have a very deadly combination of cheap engineering and cheap labour.

    In terms of alternate scenarios I often think what would have happened if the NDA had been reelected in place of UPA 1. Everything privatized, bank reform, faster moves on pension, Sensex at 40,000. I think there was even talk on labour reform – reducing the threshold of number of workers in a factory which require government permission before retrenching.

    Sure there may have been some missteps on the way (troop deployments in Iraq/Afghanistan?), but then the stronger growth and institution building would have more than compensated.


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