Frauds, terrorism, and bathtub curve

Lessons from reliability and bathtub curve for busting crimes

Photo by Andrea Lambrecht on Unsplash

Frauds and terrorism

Formidable military cantonments with awe-inspiring security have existed for centuries. Treasure, including notes and coins, have also moved for centuries. Banks have time-honoured systems and processes for internal control and audit.

Nevertheless, we hear of security breaches in military establishments. The choice of time, location, and other details point to a high level of planning. Daring and well-planned train robberies involving sovereign treasure make some Western flicks seem like minor pickpocketing. Bank frauds the size of several Satyam frauds point to governance failures from top to bottom. Investigations followed, and responsibility fixed. The immediate causes were familiar. System failures, noncompliance with laid down procedures, and ignoring established norms. One rarely identified root causes to see why noncompliance took place. And what actions could prevent them in the future. Continue reading “Frauds, terrorism, and bathtub curve”

Fintech and Financial Stability

A critical look at IMF recommendations on financial stability concerns from Fintech and DeFi

Decentralized Finance
Photo by Shubham Dhage on Unsplash

Fintech and financial stability

Fintech is technological innovation in financial activities, or in other words, financial innovation aided by technology. This by itself is not new. The ATMs which made their entry in the late 1960s was also in this sense, fintech. With the rapid growth in crypto assets in recent years, and that of decentralised ledger technology (DLT), fintech has evolved and grown rapidly in recent years to provide traditional banking functions, including deposit taking and lending. Referred to as Decentralized Finance, or DeFi for short, it threatens to disintermediate banks from savers and borrowers, transform the traditional banking landscape, and threaten financial stability. The IMF flagged its concerns in the third chapter of the April 2022 issue of its biannual Global Financial Stability Report (GFSR). Continue reading “Fintech and Financial Stability”

Covid-19 pandemic and banking regulation

Tobias Adrian and Aditya Narain of the IMF, in their article titled “Maintaining Banking System Safety amid the COVID-19 Crisis” (31 March 2020), suggest how national band supervisors should respond to ensure continued trust and confidence in the banking system. Continue reading “Covid-19 pandemic and banking regulation”

Covid-19 pandemic: Dealing with the financial impact

Agustin Carstens, General Manager, Bank for International Settlements, in an op-ed piece in the Financial Times (30 March 2020), has raised concerns about the impact of the corona virus pandemic on global financial markets. Continue reading “Covid-19 pandemic: Dealing with the financial impact”

Reforming Deposit Insurance

This is an old article going back to 2000. It is a comment on the recommendations of the Committee on Deposit Insurance in India (Chairman: Jagdish Capoor, 2000). Continue reading “Reforming Deposit Insurance”

Separating Banking Supervision

In this article, published in 1998, I argued that there is no evidence to suggest that separation of banking supervision from central banks will enhance the effectiveness of either supervision or monetary policy. On the contrary, it could be detrimental to both. The article was published in the Op-Ed page of Economic Times dated 5 October 1998. Continue reading “Separating Banking Supervision”

error: Content is protected !!