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Tuesday, August 24, 2010
a futile exercise!
I do not know whether there is a practice of calling ‘Bandh’ – as a mark of protest – in other countries! But, I am sure they are a regular part of Indian politics!! But, let us realise….the entire concept of ‘bandh’ is met with a public attitude of resignation and cynicism. In fact, people ‘do not work’ that day, play cricket, feel helpless, stay indoors watching movies, visit relatives/ friends etc
Petrol went up by Rs 3.70 per litre, diesel by Rs 2 and the LPG cylinder became dearer by Rs 35. And they are essential for transportation, daily cooking – a bare necessity – for the common man. I can understand that the crude oil in the international markets have remained ‘high’ for quite sometime. So, I do not know why this late reaction by the ruling alliance?…….Is it because congress controlled ‘coalition’ after last lok sabha elections.Is it because they need not make any more populist moves, having cornered opposition?
Or is it a remedial ‘sound economics’ corrective to curtail fiscal deficit due to subsidy in petrol and diesel prices for long? Whatever may be the reason….the public were put to discomfort, buses burnt, private vehicles attacked, shops ransacked in a move by the ‘united’ opposition to exhibit their strength in holding Bharat Bandh. The losses were to the tune of Rs 10000 crores because of nation not working a full day and prime time on TV occupied and wasted by political (huh?) debates.The concern of ‘daily wage earners’ was totally overlooked. In addition to this, flights to and fro Mumbai were delayed or cancelled, road travel and trains were stopped in the economic capital. Imagine the impact/ losses, if the economic capital Mumbai does not work for a single day?
Nationwide shut-down (due to public fear) forced by the Opposition parties to protest against rising prices may have achieved its aim for a ‘single’ day! Yes, there is inflation touching double digits and the ‘aam aadmi’ (common man) is forced to ‘pay’ to buy the essential commodities! Rising food prices as well as a general inflation are certainly a matter of concern for the public. And, I do agree the opposition parties have a ‘right’ to voice their concern on issues of national importance. In fact, it is their responsibility to do so! But, will a bandh help them in realising their objective other than creating mayhem and chaos. The times have changed now.
The ‘dandi march’ against the British tax on salt or the civil disobedience movement during the course of freedom struggle made sense then but nowadays, the governments being coalition, the responsibility for good governance is laid equally on the Opposition as well as ruling alliance. If the system is faulty, the Opposition has equal responsibility ( even though it is lesser than what ‘ruling alliance’ has) to correct the same.
I wish the Opposition is ‘intellectually’ better equipped to find solutions to the problems instead of creating new ones. There was only ‘loss’ incurred nationwide and it served to be only a aberration. There should be long-standing solutions to the problems and they should target the issues concerning public concern rather than political muscle power.
Petrol went up by Rs 3.70 per litre, diesel by Rs 2 and the LPG cylinder became dearer by Rs 35. And they are essential for transportation, daily cooking – a bare necessity – for the common man. I can understand that the crude oil in the international markets have remained ‘high’ for quite sometime. So, I do not know why this late reaction by the ruling alliance?…….Is it because congress controlled ‘coalition’ after last lok sabha elections.Is it because they need not make any more populist moves, having cornered opposition?
Or is it a remedial ‘sound economics’ corrective to curtail fiscal deficit due to subsidy in petrol and diesel prices for long? Whatever may be the reason….the public were put to discomfort, buses burnt, private vehicles attacked, shops ransacked in a move by the ‘united’ opposition to exhibit their strength in holding Bharat Bandh. The losses were to the tune of Rs 10000 crores because of nation not working a full day and prime time on TV occupied and wasted by political (huh?) debates.The concern of ‘daily wage earners’ was totally overlooked. In addition to this, flights to and fro Mumbai were delayed or cancelled, road travel and trains were stopped in the economic capital. Imagine the impact/ losses, if the economic capital Mumbai does not work for a single day?
Nationwide shut-down (due to public fear) forced by the Opposition parties to protest against rising prices may have achieved its aim for a ‘single’ day! Yes, there is inflation touching double digits and the ‘aam aadmi’ (common man) is forced to ‘pay’ to buy the essential commodities! Rising food prices as well as a general inflation are certainly a matter of concern for the public. And, I do agree the opposition parties have a ‘right’ to voice their concern on issues of national importance. In fact, it is their responsibility to do so! But, will a bandh help them in realising their objective other than creating mayhem and chaos. The times have changed now.
The ‘dandi march’ against the British tax on salt or the civil disobedience movement during the course of freedom struggle made sense then but nowadays, the governments being coalition, the responsibility for good governance is laid equally on the Opposition as well as ruling alliance. If the system is faulty, the Opposition has equal responsibility ( even though it is lesser than what ‘ruling alliance’ has) to correct the same.
I wish the Opposition is ‘intellectually’ better equipped to find solutions to the problems instead of creating new ones. There was only ‘loss’ incurred nationwide and it served to be only a aberration. There should be long-standing solutions to the problems and they should target the issues concerning public concern rather than political muscle power.
The Paris region: France's economic capital
The Paris region: Europe's economic marketplace.
Located at the heart of Europe, the Paris region is France's leading economic region and one of the top markets in Europe.
As France's capital and administrative and political centre, the Paris region is home to nearly 20% of the French population and generates around 29% of the country's wealth, which represents approximately 5% of the European Union's GDP.
Sign up your business for long-term success . During and after the exhibition...
In addition to the economic and technological vitality of the Paris region, the tradeshows held there have added appeal thanks to the excellent turnout of the local business population, including representatives from countless multinational corporations, research centres and the thousands of companies operating in the region, and the participation of the leading contractors in France.
Participating in a Paris region tradeshow is your opportunity to bring your technological and commercial projects to life in France.
Located at the heart of Europe, the Paris region is France's leading economic region and one of the top markets in Europe.
As France's capital and administrative and political centre, the Paris region is home to nearly 20% of the French population and generates around 29% of the country's wealth, which represents approximately 5% of the European Union's GDP.
Sign up your business for long-term success . During and after the exhibition...
In addition to the economic and technological vitality of the Paris region, the tradeshows held there have added appeal thanks to the excellent turnout of the local business population, including representatives from countless multinational corporations, research centres and the thousands of companies operating in the region, and the participation of the leading contractors in France.
Participating in a Paris region tradeshow is your opportunity to bring your technological and commercial projects to life in France.
SCOR, France - Building Economic Capital Models for Solvency II
Following the introduction of the ICAS regulatory standard in the UK, SCOR built a bespoke economic capital assessment tool for its local subsidiary in the UK.
Wishing to capitalize on this experience, SCOR launched a selection process to identify a modelling software solution and a consultancy firm that would help them further develop their economic capital modelling capabilities for the whole P/C group. This was with a view to creating a fully integrated internal model that they could use in anticipation of the implementation of the future Solvency II directive.
EMB's Igloo Professional software and EMB consultancy were selected as an outcome of this process. This project extends the existing relationship EMB has with the firm, since SCOR had already licensed EMB's reserving software, ResQ, worldwide at the time.
EMB UK and EMB France worked very closely on this project, benefitting from local expertise and global experience. During the past year, EMB France has helped SCOR complete the build of its internal model and documentation as well as participating in the selection of capital allocation techniques. The resulting mutual confidence between EMB and SCOR led to further cooperation on satellite projects.
The use of both Igloo Professional and ResQ was perceived as a facilitator to their merger, during the integration of Converium into SCOR, which had also licensed these two pieces of software.
From a consultancy stand point, the quality of our consultants and the proven track record of EMB in risk modelling are appreciated by SCOR and led to continued collaboration between our two firms. This confidence is demonstrated by the agreement of SCOR Group Chief Actuary, Eric Lecoeur, who kindly shared his feedback on the implementation of the SCOR internal model with attendees at a French industry seminar.
The local presence of EMB in the French market further facilitates the relationship with French companies as well as benefitting from a global resource and expertise.
Wishing to capitalize on this experience, SCOR launched a selection process to identify a modelling software solution and a consultancy firm that would help them further develop their economic capital modelling capabilities for the whole P/C group. This was with a view to creating a fully integrated internal model that they could use in anticipation of the implementation of the future Solvency II directive.
EMB's Igloo Professional software and EMB consultancy were selected as an outcome of this process. This project extends the existing relationship EMB has with the firm, since SCOR had already licensed EMB's reserving software, ResQ, worldwide at the time.
EMB UK and EMB France worked very closely on this project, benefitting from local expertise and global experience. During the past year, EMB France has helped SCOR complete the build of its internal model and documentation as well as participating in the selection of capital allocation techniques. The resulting mutual confidence between EMB and SCOR led to further cooperation on satellite projects.
The use of both Igloo Professional and ResQ was perceived as a facilitator to their merger, during the integration of Converium into SCOR, which had also licensed these two pieces of software.
From a consultancy stand point, the quality of our consultants and the proven track record of EMB in risk modelling are appreciated by SCOR and led to continued collaboration between our two firms. This confidence is demonstrated by the agreement of SCOR Group Chief Actuary, Eric Lecoeur, who kindly shared his feedback on the implementation of the SCOR internal model with attendees at a French industry seminar.
The local presence of EMB in the French market further facilitates the relationship with French companies as well as benefitting from a global resource and expertise.
Monday, August 23, 2010
Capital Economics
The latest Housing Market Analyst report from Capital Economics – the most bearish of housing market commentators - predicts that house prices have a further 20 per cent to fall.
However, they expect most of this decline to occur in the first half of this year. Thereafter prices will fall by a further five per cent beyond "fair value" as low interest rates and more affordable property encourages greater activity.
The market, they add, should stabilise in early 2010, by which point the average value of a property in the UK will have fallen by 35 per cent from peak to trough.
Transaction Levels Will Improve
Although new buyer enquiries have started to creep up recently, implying that mortgage approvals could also begin to increase, Capital Economics think that any rise in market activity this year will be modest.
They predict 750,000 transactions in 2009, up from 630,000 last year but almost 40 per cent less than 2007.
Demand, they say, will be constrained as lenders continue to keep a tight hold on lending, particularly in the face of a deteriorating economic outlook.
The report even suggests that borrowers' priorities may shift from taking out new mortgages to paying off more of their existing debt; if this is the case, it says, net mortgage lending could turn negative this year.
Affordability Improving
For those who do have money to hand, the good news is that property is becoming much more affordable.
The report notes that affordability levels are now roughly in line with their long-term average.
However, the downside is that "tightened lending criteria and fewer potential homeowners have rendered this improvement largely irrelevant".
Even with the likely prospect of more interest rate reductions to come, Capital Economics believe that mortgage demand will remain low as lenders will be wary of passing on the full cuts against the poor economic outlook.
While they forecast that the Base Rate will drop to zero per cent, they anticipate that mortgage rates for new borrowers will only come down to three per cent per cent.
The report concludes: "While the deteriorating economic outlook increases the downside risks, if official interest rates fall to zero as we expect, that could support house prices and prevent them undershooting fair value by as much as in past downturns."
However, they expect most of this decline to occur in the first half of this year. Thereafter prices will fall by a further five per cent beyond "fair value" as low interest rates and more affordable property encourages greater activity.
The market, they add, should stabilise in early 2010, by which point the average value of a property in the UK will have fallen by 35 per cent from peak to trough.
Transaction Levels Will Improve
Although new buyer enquiries have started to creep up recently, implying that mortgage approvals could also begin to increase, Capital Economics think that any rise in market activity this year will be modest.
They predict 750,000 transactions in 2009, up from 630,000 last year but almost 40 per cent less than 2007.
Demand, they say, will be constrained as lenders continue to keep a tight hold on lending, particularly in the face of a deteriorating economic outlook.
The report even suggests that borrowers' priorities may shift from taking out new mortgages to paying off more of their existing debt; if this is the case, it says, net mortgage lending could turn negative this year.
Affordability Improving
For those who do have money to hand, the good news is that property is becoming much more affordable.
The report notes that affordability levels are now roughly in line with their long-term average.
However, the downside is that "tightened lending criteria and fewer potential homeowners have rendered this improvement largely irrelevant".
Even with the likely prospect of more interest rate reductions to come, Capital Economics believe that mortgage demand will remain low as lenders will be wary of passing on the full cuts against the poor economic outlook.
While they forecast that the Base Rate will drop to zero per cent, they anticipate that mortgage rates for new borrowers will only come down to three per cent per cent.
The report concludes: "While the deteriorating economic outlook increases the downside risks, if official interest rates fall to zero as we expect, that could support house prices and prevent them undershooting fair value by as much as in past downturns."
Economic capital and Basel II
Basel II introduces a three-pillar concept that seeks to align regulatory requirements with economical principles of risk management. Its capital requirements have wide-ranging implications for risk management and, thus, for corporate governance. Basel II compliance is a risk management challenge with strategic business implications rather than a pure technical issue. KPMG professionals can help cope with these new challenges.
Regulatory capital planning has always been an important aspect of banks’ compliance activities. Now, however, economic capital planning is becoming increasingly important to banks’ overall competitiveness-and with the development of the Basel II proposals for a new capital accord, understanding and measuring economic capital has also become a compliance obligation.
“Economic capital” is the capital banks set aside as a buffer against potential losses inherent in any business activity-corporate lending, for example, or currency trading. Banks’ focus on economic capital is part of an industry-wide movement to measure risks, to optimize performance measurement, to base strategic decisions on accurate information, and thus to strengthen an institution’s long-term profitability and competitiveness.
In evaluating these issues, leaders are considering questions including:
* Do we understand the nature and level of risk the bank is taking?
* How much capital is needed to support the bank’s total risk? What is the expected return on that capital?
* Is the bank over or under capitalized in relation to its risks?
* Are individual business lines creating or destroying shareholder value?
* What are the major sources of concentration and diversification on our portfolio? What opportunities for growth or diversification exist within the bank?
* How should the business’s capital be managed within constraints imposed by regulators, investors, and rating agencies?
* How do we improve our portfolio performance? Which exposures should we buy or sell and in what quantities? What is an optimal strategy for hedging/selling down risk?
* Do we need better analytics to support our discussions with rating agencies and thereby support our rating?
Although economic capital planning has been evolving for a number of years, it has attained new focus and urgency as a result of the regulatory mandates of the Basel II Capital Accord (Basel II). In a new three-pillar framework, Basel II introduces the concept of economic capital into the regulatory capital consideration by requiring banks to determine capital adequacy based on the level of risk posed by specific business activities. In emphasizing capital planning overall, Basel II overcomes a substantial shortcoming of its 1988 predecessor, which did not require banks to develop their own methods, processes, and systems to measure the capital level adequate for the risks they assume.
This white paper emphasizes the importance of banks’ evolving efforts to integrate economic capital planning into overall risk management. These efforts can help banks build value in their businesses as well as comply with Basel II.
Regulatory capital planning has always been an important aspect of banks’ compliance activities. Now, however, economic capital planning is becoming increasingly important to banks’ overall competitiveness-and with the development of the Basel II proposals for a new capital accord, understanding and measuring economic capital has also become a compliance obligation.
“Economic capital” is the capital banks set aside as a buffer against potential losses inherent in any business activity-corporate lending, for example, or currency trading. Banks’ focus on economic capital is part of an industry-wide movement to measure risks, to optimize performance measurement, to base strategic decisions on accurate information, and thus to strengthen an institution’s long-term profitability and competitiveness.
In evaluating these issues, leaders are considering questions including:
* Do we understand the nature and level of risk the bank is taking?
* How much capital is needed to support the bank’s total risk? What is the expected return on that capital?
* Is the bank over or under capitalized in relation to its risks?
* Are individual business lines creating or destroying shareholder value?
* What are the major sources of concentration and diversification on our portfolio? What opportunities for growth or diversification exist within the bank?
* How should the business’s capital be managed within constraints imposed by regulators, investors, and rating agencies?
* How do we improve our portfolio performance? Which exposures should we buy or sell and in what quantities? What is an optimal strategy for hedging/selling down risk?
* Do we need better analytics to support our discussions with rating agencies and thereby support our rating?
Although economic capital planning has been evolving for a number of years, it has attained new focus and urgency as a result of the regulatory mandates of the Basel II Capital Accord (Basel II). In a new three-pillar framework, Basel II introduces the concept of economic capital into the regulatory capital consideration by requiring banks to determine capital adequacy based on the level of risk posed by specific business activities. In emphasizing capital planning overall, Basel II overcomes a substantial shortcoming of its 1988 predecessor, which did not require banks to develop their own methods, processes, and systems to measure the capital level adequate for the risks they assume.
This white paper emphasizes the importance of banks’ evolving efforts to integrate economic capital planning into overall risk management. These efforts can help banks build value in their businesses as well as comply with Basel II.
Fermat Enterprise Risk Management Suite
Fermat Enterprise Risk Management Suite provides integrated risk and performance management for the global financial services industry. The award-winning products address enterprise-wide internal and regulatory requirements and assist financial institutions to reduce risk and maximize returns in their daily business decisions.
Global banks use Fermat Enterprise Risk Management software solutions such as Basel II, Economic Capital and Limit Monitoring, to comply with demanding regulatory standards in their countries and optimize their risk and performance management practices.
Global banks use Fermat Enterprise Risk Management software solutions such as Basel II, Economic Capital and Limit Monitoring, to comply with demanding regulatory standards in their countries and optimize their risk and performance management practices.
* Targeted, scalable solutions addressing real and pressing customers' need
* Modular, building block solution architecture reducing barriers to adoption and enabling banks a validated step-by-step deployment approach
* A simplified integration and evolution that builds upon previous investments
* Respect of delivery commitments: we deliver on time as testified by our track record
* Well-defined market focus and strong customer references supporting a capital-efficient growth momentum
* Strong intellectual property and highly educated, diverse human capital
* Commercial leverage of successful technology, channel and delivery partnerships
* Modular, building block solution architecture reducing barriers to adoption and enabling banks a validated step-by-step deployment approach
* A simplified integration and evolution that builds upon previous investments
* Respect of delivery commitments: we deliver on time as testified by our track record
* Well-defined market focus and strong customer references supporting a capital-efficient growth momentum
* Strong intellectual property and highly educated, diverse human capital
* Commercial leverage of successful technology, channel and delivery partnerships
Truly Integrated
Based on a robust and flexible architecture, the Fermat product range has been designed from scratch by financial engineers and software developers combining extensive academic and professional knowledge in finance, mathematics and information technology.
All software packages have been built on a shared and fully integrated infrastructure, the Fermat DataMart (FDM), which is the cornerstone of our modular product line. All modules benefit from the same data model and the Fermat DataMart has a strong focus on performance and handling large volumes of data. As a consequence, Fermat Enterprise Risk Management Suite enables financial institutions to operate on a truly consistent software solution within a shared functional dataflow and a single workflow.
Product Features
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