When central planners take the outcome away from the self-organising system of the market economy, we often get strange outcomes. At the end of June 2009, 32 foreign banks
were in India with 293 branches. In addition, 43 foreign banks were in India through `representative offices’. (Source: RBI Annual Report. Hat tip: Radhika Pandey).
In a news item [...]

H.R. 627 The Credit Card Act of 2009 is a sweeping reform of credit card law. Many consumers are concerned over how this act will affect their spending capacity throughout the new year. The act is called into effect in February, meaning consumers will have very little time to determine how to use the act [...]

As the months are going by, we’re slowly building a better picture of what went wrong and why. If you want to only spend two hours on figuring out the financial crisis, then listen to this interview with Charles Calomiris, and read this interview with Raghuram Rajan.

The problem
The main source of funding for microfinance in India has been through banks, primarily through the forced `priority sector lending’. Over the years, the demand for funds in the microfinance industry has outpaced the growth in investment by banks. In addition, banks are not the ideal place for these assets, given the nature of [...]

Tackling systemic risk is no job for the status quo by William Donaldson and Arthur Levitt, in the Financial Times.
Short-Selling Bans around the World: Evidence from the 2007-09 Crisis by Alessandro Beber and Marco [...]

If you are unfamiliar with hawala banking then I recommend reading Hawala Banking And Currency Controls Part I to become familiar with the concept before reading further.  If you are familiar with how hawala banking works then you will probably know that hawala transactions are not inherently wrong and should not arouse any suspicion in [...]

I wrote an article in Financial Express titled The problem of big banks. On this subject, also see:

In the world of banks, bigger can be better, Charles Calomiris in the Wall Street Journal.
A three-way split is the [...]

On HowToVanish many people have been asking questions in response to an article I posted about hawala banking. It is a great topic and one that I enjoy talking about so I thought I would respond by fleshing out what kinds of transactions take place in a hawala system and then answer the biggest [...]

The vampire squids of Wall Street and Washington DC are parasitic organisms and you are locked in mortal combat with them.  They desire to suck all the value they can from you and then toss your carcass aside.  As with most parasites they prefer subtle tactics that do not attract attention.
But now the spotlight is [...]

Jerry Caprio and Ila Patnaik, at two ends of the world, on the same subject.
The UK Special Resolution Regime has excellent documentation on the web.
There is a lot of talk in India about financial stability, where basic ideas are distorted to defend the [...]