Tag Archives: economy

Are We On The Verge Of Another Financial Crisis?

Are we on the verge of another financial crisis?

It is a question well worth asking as the prices of stocks and property have been sky high by central bankers flooding the markets with cheap money.

What should risk professionals do?

The first question for risk managers, internal auditors and finance professionals is; how much of the cheap and plentiful liquidity provided by Quantitative Easing, or QE as it is known, has gone into inflating asset prices—stocks, bonds and housing?

The second question is: how far will asset prices fall when the Fed and the Bank of England start to “taper” or reduce their QE and how will that impact my institution? Continue reading

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How Race, Xenophobia Are Defining American Democracy

The following is the third in a series of articles on democracy. The first article, on the Arab Spring can be found here and the second article on the EU can be found here.

During the 1980s, despite his hawkish attitude towards the Soviet Union and his placement of US nuclear missiles in Europe, President Ronald Reagan reached agreement on the reduction of nuclear weapons with Soviet leader Mikhail Gorbachev. Some historians say that Reagan’s challenge to the Soviet system was one of the reasons for the downfall of communism.

Fast forward to December 2012 where the US Senate fails to muster the two-thirds majority required for ratifying the UN Convention on the Rights of Persons with Disabilities. They failed because Republicans feared the Tea Party would go against them for making deals with the UN, a “foreign power”.

It is a sad statement on the state of democracy in America today—those who claim to be Reagan’s followers have no clue as to how his legacy was developed. It is all a testament to the role race and xenophobia are playing in the political gridlock that is today’s American democracy. Continue reading

Is The EU Good Or Bad For Democracy?

The following is the second in a series of articles on democracy. The first article, on the Arab Spring, can be found here.

Those who believe that the European Union is bad for democracy are perhaps not taking into account all of its achievements. They need to take a closer look. Continue reading

Banks Desperately Need A Crisis Management Plan (Part 2)

A few days ago I posted an article, which can be found here, setting out why banks needed to up their game in terms of developing a plan to manage the current crisis, otherwise they faced the imposition of regulations and higher capital requirements that would be bad for them and bad for their economies. Well both Barclays and Deutsche just got a nasty surprise. Continue reading

Bloomberg Contributor Predicts Fall Of The Chinese Economy

A Bloomberg article by William Pesek predicts the fall of the Chinese economy based on the fact that the country has embarked on a project to build the largest skyscraper in the world–as did the US, Japan, Malaysia and Japan before it. Continue reading

The Very Human Side Of Economics

So much of what passes for discussion these days on how to improve economies is centred around GDP growth, debt ratios, tax regimes, the regulatory environment, infrastructure development and corporate profitability. Moreover, when a company announces that it is cutting costs, by laying off workers and closing down divisions, analysts cheer, the stock price rises and commentators laud the good decision. Continue reading

Important Lessons In Understanding The Risk Culture In Banks

The following is the second in a series of articles on bank risk culture. The previous article can be accessed here.

The subject of the risk culture in banks is all the rage these days and experts and academics of every hue and stripe have opined on the subject and given their views. A 2012 report by Ernst & Young entitled; Progress in financial services risk management: A survey of major financial institutions, states the following:

“Culture is a critical area of management focus, particularly for firms most severely impacted by the 2009 crisis. Strengthening risk roles and responsibilities, enhancing communication and training, and reinforcing accountability were the key initiatives reported to strengthen risk culture. Making risk “everyone’s business” throughout the organization is an ongoing effort.” Continue reading