Saturday, April 25, 2009

Financial Sector Assessments--India and the US

Federal Reserve has released the Design and Implementation Note on Supervisory Capital Assessment Programme conducted by it recently. It is provided below:

Findings of the study will become public on 4th May. The Design indicates that the study must have been rigorous. In contrast, the Committee on Financial Sector Assessment headed by Dr.Rakesh Mohan which studied the results of stress tests on Indian banks has apparently been less rigorous and more pragmatic. Its findings are:

Wednesday, April 22, 2009

Satyam fraud -- Copy of chargesheet

Copy of chargesheet published in NewYork Times is given below:
It remains to be seen if TechMahindra has taken the right decision to bid for the company. Will TechMahindra reap the Winners' Curse?

Axis Bank --- A.T.Pannir Selvam

ATP was a Director in Axis Bank and was one of the three members of Management Committee. He passed away yesterday when about to catch a flight from Mumbai to Chennai.

The marathon Board Meeting which decided on next CEO of the bank has apparently taken a toll. Some of the Board processes are dysfunctionally stressful for the participants.

Monday, April 20, 2009

New CEO for Axis Bank

Selection of a new CEO for Axis Bank makes interesting reading particularly because of the existing CEO's action and reaction.
Mr.P.J.Nayak, the present Chairman cum CEO was the lone dissenter in the Board Meeting against the recommendation favouring Ms.Shikha Sharma. He is supposed to have favoured an internal candidate who is presently an executive director. This part is understandable; one is entitled to one's opinions. But what he did soon after the Board's decision to recommend the name of Ms.Shikha Sharma does not add to his credit. He submitted his resignation from the Board to be accepted forthwith. Is he trying to show that he has immense faith in Axis Bank's employees and therefore there is no need to look outside. Or is he trying to avoid an outsider's objective focus on his decisions as Chairman cum CEO.
Another note-worthy development is thev likely appointment of Mr.K.N.Prithviraj as Chairman of Management Committee. His modest roots and incorruptible ways are an oasis in the desert of extravagance and corruption in the banking world.

Tuesday, April 14, 2009

Misinterpretation of Bhagavad Gita {II}

That Mr.BS Raghavan's interpretation is skewed becomes more evident if we read Swami Ranganadananda's explanation. Says the Swami: "Everyone has his or her own dharma, or way of life and work and human relations. According to one's psychological disposition, a person has a particular bent of mind and work capacities. That is one's dharma. Sri Krishna says, better to die in one's own dharma, than to live in somebody else's dharma. That dharma is good for that person, this is good for you. Find out your own dharma based on your own mental disposition. Sreyaan svadharmo vigunah {this is how the 35th sloka begins}, 'even though one's own dharma is not of high quality, still it is the best for oneself'. This is a teaching based on the individual identity of every human being, like the individuality of one's thumb impression. Similarly, there is a psychic individuality. Let one respect it and not imitate somebody else."

It is obvious that the sloka contains excellent psychological insight and to say that it lends itself to devious interpretations betrays one's spiritual ignorance.

Monday, April 13, 2009

Misinterpretation of the Bhagavad Gita

Mr.B.S.Raghavan otherwise known for his erudite writings wrote as under in the Business Line dated 25th March:

"The Election Commission (EC) has decreed that he did. His political opponents have no doubt that he did. Even his cousin, Ms Priyanka Gandhi, seems to have assumed that he did, and even helpfully showed him a way out of the mess by asking him to read the Bhagavad Gita.
Incidentally, right here, I am obliged to point out that the advice can boomerang . In the Gita,as in most Hindu scriptures, one can find support for mutually contradicting precepts.

There is a sloka in the Gita, svadharme nidhanam shreyah pradharma bhayavaha, which can be roughly translated as “One had better perish by defending one’s own faith, because of the frightening nature of other faiths”! What other faiths, or ways of life, Lord Krishna had in view is unclear but a Hindu hardliner may well find in it sufficient inspiration for plugging Hindutva for all it is worth."
The author was referring to Varun Gandhi's hate speech against a community.The sloka from the Gita is the 35th in Chapter III. This chapter deals with Karma Yoga or The Path of Action. Dr.Jack Hawley in his book "The Bhagavad Gita : A Walkthrough for Westerners" interprets as follows:
" Krishna tells Arjuna :'You are a warrior-prince by birth and training.If you now try to avoid your duty and mutate into a sanyasi {spiritual ascetic} merely because you face doing some things that you imagine are painful, you will be violating your inner Truth {your conscience, your dharma}, which is the root basis of your life. It is even better to die doing one's own duty than attempt to do the duty of another.' " The western scholar has summarised the meaning rationally. For a similar but deeper understanding, reference to commentary by Shri Nampayal A.S.Iyengar is rewarding. Noting that the verse occurs in the chapter relating to Karma Yoga, his translation goes as follows:
"Better one's own dharma {karma yoga} without excellence {in non-essentials} than another's dharma well practised for some time.In one's own dharma {karma yoga} death is preferable. Another's dharma brings danger." Another's dharma here refers to jnana yoga for a warrior on the battle field.

The Gita, properly interpreted, is uplifting.Our ability to misinterpret is not Krishna's fault. It is better to follow a correct interpretation than to be a creative misinterpreter.

Sunday, April 12, 2009

Nassim Taleb on how to prevent financial Black Swans

In an attention-grabbing article in Financial Times, Nassim Taleb has narrated ten rules which will prevent economic disasters. I am thankful to Prof.TT Rammohan's blog for providing reference to this.
The ten commandments to definancialise the economy are very interesting.They are also a knee-jerk reaction to recent extreme events. In our anxiety to prevent Black Swans, we should not depopulate all swans.