tag:blogger.com,1999:blog-6297413898275266606.post905956362693114051..comments2024-03-27T18:15:59.096+08:00Comments on Economics Malaysia: Department of "Huh"?hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-6297413898275266606.post-1829406285436695942009-03-29T21:49:00.000+08:002009-03-29T21:49:00.000+08:00Investment banks (and merchant banks) differ from ...Investment banks (and merchant banks) differ from commercial banks in the sense that their funding is almost entirely on the wholesale level, i.e. from the money market rather than from customer deposits (retail funding). That means their balance sheets are far more sensitive to liquidity risk. Raising their maximum leverage does not make sense from the point of view of managing systemic risk, hishamhhttps://www.blogger.com/profile/06265308095732759923noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-72817528782042153592009-03-28T10:49:00.000+08:002009-03-28T10:49:00.000+08:00I have a blog post abt OECD's report titled "The C...I have a blog post abt OECD's report titled "The Current Financial Crisis – Causes and Policy Issues". The author shares your view. Year 2004 and leverage ratio.<BR/><BR/>do you think Basel II forming process is "captured" by financial institutions ?<BR/><BR/>Quite ironic. Basel II that supposed to improve on risk management contributes(?) to more risks to the systems.WYhttps://www.blogger.com/profile/00687384573537625332noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-49784395487340362562009-03-26T18:51:00.000+08:002009-03-26T18:51:00.000+08:00"should amount of leverage and amount of derivativ..."should amount of leverage and amount of derivatives used be regulated ?"<BR/><BR/>Bingo! It's the leverage used that makes for excessive betting, and incidentally makes financial institutions more fragile. I understand that US investment banks were allowed to raise their leverage from 12x (normal Basle I requirement) to 30x in 2004.<BR/><BR/>Coincidence? Don't think so.hishamhhttps://www.blogger.com/profile/06265308095732759923noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-55863411242940072032009-03-26T17:13:00.000+08:002009-03-26T17:13:00.000+08:00I wonder whether the difference of normal speculat...I wonder whether the difference of normal speculation & excessive speculation lies on amount of leverage and amount of derivatives used. <BR/><BR/>should amount of leverage and amount of derivatives used be regulated ?WYhttps://www.blogger.com/profile/00687384573537625332noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-32938430404702961752009-03-26T15:11:00.000+08:002009-03-26T15:11:00.000+08:00I understand the point you are making and, I agree...I understand the point you are making and, I agree that there is a contradiction in the op-ed piece.de minimishttps://www.blogger.com/profile/06478671079348612565noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-3606154624228371552009-03-26T13:03:00.000+08:002009-03-26T13:03:00.000+08:00The thing is - it's all normative. How do you diff...The thing is - it's all normative. How do you differentiate between 'normal' speculation (which is necessary for the price discovery process), and 'excessive' speculation? What happens if excessive price movements are 'fundamentally' driven?<BR/><BR/>I generally agree about regulation of the hedge fund industry, mainly in terms of their use of leverage, but not necessarily to limit speculation. hishamhhttps://www.blogger.com/profile/06265308095732759923noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-23903356972947479232009-03-26T11:38:00.000+08:002009-03-26T11:38:00.000+08:00In the current bearish environment of falling pric...In the current bearish environment of falling prices, the speculators and market manipulators are sidelined.<BR/><BR/>There were strong suspicions of market manipulation when crude oil prices reached stratospheric heights although no one in any jurisdiction has been hauled up to-date.<BR/><BR/>The columnist is probably alluding to the regulatory sentiment that some form of control be put in placede minimishttps://www.blogger.com/profile/06478671079348612565noreply@blogger.com