Prof. Jayanth R. Varma's Financial Markets Blog (comments) http://www.iima.ac.in/~jrvarma/blog/index.cgi A Blog on Financial Markets and Their Regulation en Copyright Prof. Jayanth R. Varma blosxom simplerss20 modified http://blogs.law.harvard.edu/tech/rss <![CDATA[Re: Korean derivatives reforms come full circle]]> Comment relating to Korean derivatives reforms come full circle (posted Mon, 03 Jun 2019 13:26:00 +0530)
Prabhat Singh wrote on Sat, 22 Jun 2019 14:04

Hi Sir, MY self Prabhat Im Option trader from 2013 in broking House , some days back went to your article about international margin requirement . I know their a big trading desk specially broker desk do spread trading like butterfly and many other , and make consistently return . Im doing my own research in option I need your help , I think still very wide opportunity, in option specially in indian market. Because hiher margin requirement for retail participant retail mindset always fascinate speculation and end up with losing money . I know many of my friend who trade with me in office Now trade in US Market because of less margin requirement and happily beared high brokerag, Please connect me .Thanks Prabhat From Mumbai 9987558701

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Sat, 22 Jun 2019 14:04:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2019-20/Korea-derivatives-reforms.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2019-20/Korea-derivatives-reforms.discuss#0
<![CDATA[Re: Blockchain in Finance]]> Comment relating to Blockchain in Finance (posted Tue, 02 Apr 2019 13:01:00 +0530)
Harsh Chaudhary wrote on Tue, 02 Apr 2019 18:09

Got the opportunity to read through the main article of yours. Certainly, highly informational and gives a good boost to think on the mentioned lines.

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Tue, 02 Apr 2019 18:09:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2019-20/vikalpa-blockchain.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2019-20/vikalpa-blockchain.discuss#0
<![CDATA[Re: Learning from Crises]]> Comment relating to Learning from Crises (posted Thu, 28 Mar 2019 15:01:00 +0530)
SUSHIL PRASAD wrote on Tue, 02 Apr 2019 11:34

Similar results / institutional experience could be built up if the HR Policy of banks mandates moving people from business to risk to rehabilitation (ie financial restructuring) and recovery over the time most bankers move to middle management, say over the first 12-15 years of their work experience. The practice generally is to have managers specialise - to the extent that most managers even restrict themselves to certain industry segments. Change is disruptive and most managers dislike moving from one segment to another. It is helpful if appropriate weightage is given for varied experience in promotions.

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Tue, 02 Apr 2019 11:34:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/crisis-experience.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/crisis-experience.discuss#0
<![CDATA[Re: When do you sell your best businesses?]]> Comment relating to When do you sell your best businesses? (posted Sat, 09 Mar 2019 18:13:00 +0530)
Abhishek Kar wrote on Sat, 23 Mar 2019 00:26

Radical viewpoint/ perspective Professor, the 2 arguments in favour makes sense and the last line advice is pertinent.

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Sat, 23 Mar 2019 00:26:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/sell-good-businesses.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/sell-good-businesses.discuss#0
<![CDATA[Re: When do you sell your best businesses?]]> Comment relating to When do you sell your best businesses? (posted Sat, 09 Mar 2019 18:13:00 +0530)
Rohit Gupta wrote on Sun, 26 May 2019 21:55

A very eloquent read, Professor. I'd humbly request for a second of yours though. If the company in debt sells out its profit business to repay debts, how would they cash on their current business model or regrow again?

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Sun, 26 May 2019 21:55:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/sell-good-businesses.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/sell-good-businesses.discuss#1
<![CDATA[Re: When do you sell your best businesses?]]> Comment relating to When do you sell your best businesses? (posted Sat, 09 Mar 2019 18:13:00 +0530)
Rohit Gupta wrote on Sun, 26 May 2019 21:50

A very eloquent read, Professor. I'd humbly request for a second of yours though. If the company in debt sells out its profit business to repay debts, how would they cash on their current business model or regrow again?

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Sun, 26 May 2019 21:50:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/sell-good-businesses.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/sell-good-businesses.discuss#2
<![CDATA[Re: Convergence of insurance and derivatives]]> Comment relating to Convergence of insurance and derivatives (posted Sat, 23 Feb 2019 18:36:00 +0530)
Santosh Saladi wrote on Sun, 03 Mar 2019 00:07

An interesting article. Mark to market for parametric insurance is definitely useful from a risk management point of view. Deriving a settlement price to do mark to market can be a challenging exercise.

For example a hurricane keeps changing it's path several times. If the event of flooding happens there would be a payout, else none. Price of such options would be extremely dynamic.

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Sun, 03 Mar 2019 00:07:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/insurance-derivatives-convergence.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/insurance-derivatives-convergence.discuss#0
<![CDATA[Re: Convergence of insurance and derivatives]]> Comment relating to Convergence of insurance and derivatives (posted Sat, 23 Feb 2019 18:36:00 +0530)
Balaji Thiruvengadasamy wrote on Tue, 23 Apr 2019 12:34

It is hard to escape derivatives!

It is amusing to listen to "conservative" institutional investors, who keep away from derivatives and yet have 70% of their assets invested in stocks.

Name matters after all. At least in finance!

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Tue, 23 Apr 2019 12:34:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/insurance-derivatives-convergence.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/insurance-derivatives-convergence.discuss#1
<![CDATA[Re: Indian Bankruptcy Code: Morality play reaches a dead end]]> Comment relating to Indian Bankruptcy Code: Morality play reaches a dead end (posted Wed, 13 Feb 2019 22:16:00 +0530)
SUSHIL PRASAD wrote on Wed, 13 Mar 2019 11:23

There is an old Indian saying - one cannot clap with one hand. Or as the westerners put in - it takes two to tango! Putting all the onus on bad loans on the borrower is nothing but politics and will not resolve the issue. (a) the only formal study I have found on reasons for loans going bad (Loan Repayment Delinquency in Upper Volta) it was found that "Regardless of the definition of delinquency preferred, an understanding of the causes for this delinquency is essential if the delinquency rate is to be reduced. The inventory of credit offered evidence which could show that 37% of the cases of delinquency were the fault of the borrowers, 37% were the fault of the lending institution! (b) Current Indian appraisal standards do not differentiate between equity risk and credit risk. WC assessment techniques and lending processes grey out of credit rationing - not credit risk assessment. So the portfolio of assets of banks includes both equity and credit risk, while the pricing is wholly debt oriented. There is no way the portfolio would be anything but sub-optimally priced and NPAs would continue to occur regularly. This aspect is best seen in the perspective of the assets of our so called DFIs. They were essentially providing Venture Capital services at debt pricing. So while they were participating in the downside, they had no recourse to the upside - especially when equity conversion was removed from their purview.

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Wed, 13 Mar 2019 11:23:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/IBC-morality-play.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/IBC-morality-play.discuss#0
<![CDATA[Re: New Zealand shows the way again?]]> Comment relating to New Zealand shows the way again? (posted Mon, 17 Dec 2018 13:32:00 +0530)
Kevin Stone wrote on Wed, 19 Dec 2018 14:49

When we are psychologically safe at work, we’re willing to accept that we can be ignorant about many things and very smart about others. Psychologically safe employees are more interested in learning and excellence and in genuinely connecting with others than in looking good or spreading scandals. That sounds like what everyone wants, but as human beings we’re hardwired and socialized to care about what others think of us. This is not bad or good, it’s just true. And it is sometimes unhelpful in knowledge-intensive organisations like ours. We may need to override some of our very human instincts – the instinct to look good instead of being truthful, to avoid hurting someone’s feelings instead of being truthful, or to agree with the boss instead of saying, ‘I’m not sure that’s going to work’.

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Wed, 19 Dec 2018 14:49:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/New-Zealand-bank-capital.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/New-Zealand-bank-capital.discuss#0
<![CDATA[Re: Mutual fund redemptions redux]]> Comment relating to Mutual fund redemptions redux (posted Tue, 02 Oct 2018 14:22:00 +0530)
Harsh Chaudhary wrote on Tue, 02 Oct 2018 21:45

Great to see that officials of your calibre hold such opinions regarding the dynamics of present-day economics. It would be great if you could highlight a few steps towards providing the liquidity to the unitholders in practice?

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Tue, 02 Oct 2018 21:45:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/mutual-fund-redemptions-redux.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/mutual-fund-redemptions-redux.discuss#0
<![CDATA[Re: Re: Mutual fund redemptions redux]]> Comment relating to Mutual fund redemptions redux (posted Tue, 02 Oct 2018 14:22:00 +0530)
Prof. Jayanth R Varma wrote on Fri, 05 Oct 2018 11:16

Banks lend against all kinds of collateral (even against shares) and it is not at all difficult for them to lend against debt mutual fund units. All that is needed is a signal from the regulators (particularly RBI) encouraging this or at least making clear that it is not discouraged.

PS: I am not an "official", only an academic stating my personal views.

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Fri, 05 Oct 2018 11:16:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/mutual-fund-redemptions-redux.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/mutual-fund-redemptions-redux.discuss#0-0
<![CDATA[Re: Mutual fund redemptions redux]]> Comment relating to Mutual fund redemptions redux (posted Tue, 02 Oct 2018 14:22:00 +0530)
Gaurav Raizada wrote on Wed, 03 Oct 2018 12:00

Makes little sense for MF to have liquidity lines. They are independent vehicles and are in no way a systemic risk. I wonder if these people even understand the concept of MTM.

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Wed, 03 Oct 2018 12:00:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/mutual-fund-redemptions-redux.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/mutual-fund-redemptions-redux.discuss#1
<![CDATA[Re: Long hiatus ending soon]]> Comment relating to Long hiatus ending soon (posted Mon, 20 Aug 2018 15:40:00 +0530)
abhishek wrote on Sat, 25 Aug 2018 22:16

great to hear that news sir. !! hope to read your views soon

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Sat, 25 Aug 2018 22:16:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/hiatus.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/hiatus.discuss#0
<![CDATA[Re: Long hiatus ending soon]]> Comment relating to Long hiatus ending soon (posted Mon, 20 Aug 2018 15:40:00 +0530)
Sahil wrote on Tue, 04 Sep 2018 16:07

Sir, Glad to see a new post on the blog today!

Your article on proprietary software is very relevant and an interesting read. Due to dominance of platforms like the Windows OS, MS Office applications, Adobe PDF most of the files used in corporate world or academia are now ppt/pptx/doc/docx/xls/pdf etc. A large repository of information can become unusable if any of these proprietary application softwares lose tech support. It brings to mind a similar situation in which due to ubiquity and ease of Whatsapp, many informal groups within private and public sector use whatsapp to communicate information. Not only does this lead to legal risk but also to potential information security risks.

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Tue, 04 Sep 2018 16:07:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/hiatus.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2018-19/hiatus.discuss#1
<![CDATA[DevOps Tutorial]]> Comment relating to Corporate pivots and corporate ponzis (posted Wed, 21 Mar 2018 18:41:00 +0530)
Sonam Jain wrote on Wed, 20 Jun 2018 16:09

I appreciate your work on Blockchain. It's such a wonderful read on Blockchain course. Keep sharing stuffs like this. I am also educating people on similar Blockchain training so if you are interested to know more you can watch this Blockchain tutorial:-https://www.youtube.com/watch?v=KvK5-_JKQjw

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Wed, 20 Jun 2018 16:09:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2017-18/pivots-and-ponzis.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2017-18/pivots-and-ponzis.discuss#0
<![CDATA[Re: Do we need banks?]]> Comment relating to Do we need banks? (posted Sun, 18 Mar 2018 16:06:00 +0530)
Non Contextual Stats wrote on Mon, 19 Mar 2018 14:56

Using the findings from a study done on US Banks to pronounce that Banks in India are not relevant?

Can you try calculating the RoA for the Indian Banking system and see if that holds true? Otherwise, it seems like a sweeping generalisation done with just a phrase saying " this is more relevant in India". That is a HUGE leap of faith!

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Mon, 19 Mar 2018 14:56:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2017-18/do-we-need-banks.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2017-18/do-we-need-banks.discuss#0
<![CDATA[Is financial system necessary?]]> Comment relating to Do we need banks? (posted Sun, 18 Mar 2018 16:06:00 +0530)
Durga wrote on Tue, 24 Apr 2018 12:46

I was going through one of the articles in ET and found your name in association with IIM-A.

Then Through your profile on the site. Needless to say, your profile was impressive.

However, there were certain things that did not seem to go well with the insistence of nature on human beings.

You seem to be part of many organisations (kind of board member and so on). How can you handle so many things or manage to be in so many positions at the same time. Human Being is not a Multi tasker by nature, so it is baffling to see u occupy so many positions. I have one question pertaining to this part. Are you doing justice to all the positions that you have occupied? I might be attracting your wrath at this point but it is necessary that the professors of our country are truthful to themselves atleast.

I saw the term 'research' in your profile. What does research mean according to you? Were you a science guy at any point in your life? I can take someone say they are researching on quantum electrodynamics or say microbiology- as both of them lead us to the bahaviour of the nature.

On the contrary, you call derivative, financial research. That sounds absurd as these financial instruments are more or less man made and they work on the way the consumers behave. Sometimes, they rig the behaviour of the consumer for better benefits.

So, finance, accounting are not some natural laws. They are there because there is money. Once the importance of money is gone may be some cryptocurrency usurps the traditional currency or the day food and comfort can't be bought by currency, financial system loses its importance, so do you people.

Regards, Sravan

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Tue, 24 Apr 2018 12:46:00 +0530 https://faculty.iima.ac.in/~jrvarma/blog/index.cgi/Y2017-18/do-we-need-banks.discuss http://www.iima.ac.in/~jrvarma/blog/index.cgi/Y2017-18/do-we-need-banks.discuss#0-0