Practical analysis for investment professionals


Who Protects You from Losses?

Gains and losses are the product of human behavior, driven by greed, fear, and sloppiness, with an accelerator of leverage thrown in to shorten the terminal period. This is the way it has always been and probably always will be.

Book Review: The End of Banking

In addition to carefully explaining how the financial sector maneuvered itself into the financial crisis of 2007–08, The End of Banking presents several unconventional ideas to do away with regulatory capital arbitrage that sticks taxpayers with the bill for bankers’ risk taking. It also promises a fairly straightforward policy framework that proposes to reduce shadow banking, decentralize financial services from too-big-to-fail banks, improve regulation, and realign the private and the public sector with transparent monetary policy.

What’s Wrong with the Asian Wealth Management Industry?

Why have some private banks in the Asia Pacific region grumbled about profit? Paul Smith, CFA, managing director, Asia Pacific global head, institutional partnerships, at CFA Institute, says it’s because private wealth business models in the region are not connecting with the needs of local clients.

Nobel Laureate Robert Engle on VaR, Systemic Risk, and Liquidity

Nobel laureate Robert Engle discusses the development of the ARCH model, the global financial crisis, systemic risk, and forecasting liquidity with ARCH models.

Shadow Banking Is Hurting China’s Banks — And That’s a Good Thing

No doubt shadow banking in China is large (30% of total banking assets, according to JPMorgan’s estimates) and carries unknown risks. But China’s problem is not shadow banking itself, it is a dysfunctional credit system.

Urbanization and Securitization: Two Key Trends to Watch in China’s Economic Rebalancing

With around 10,000 projects now in progress throughout the country, “the urbanization process in China is one that is absolutely unprecedented in human history,” according to Zheng Xiaoping. And, while securitization is an important financing tool for urban development in China, it is also becoming key to China’s fixed-income market.

Poll: Will China’s New “Super Agency” Lead to Faster Financial Reforms and Liberalizations?

The result of this poll suggest that respondents are in general quite optimistic that the newly set up super agency will lead to an even faster pace of financial sector reforms and liberalizations in China.

Government Debt vs. Tough Love

What would the world look like under tough love? Governments would rely on their taxing authority to meet much more limited needs, and some of present expenditures would be taken over by the private sector.

Joe Zhang on China’s Credit Crunch, Microcredit, and Systemic Risk

Joe Zhang, chairman of Wansui Micro Credit, says there is no problem with shadow banking in China; microcredit actually provides an invaluable service to small businesses. The key policy issue is how to make solid progress in liberalizing interest rates and ending financial repression.

Fraser Howie on China: Expect Nasty Shocks to Bank Balance Sheets

In the second installment in our series of interviews with experts on China, Fraser Howie explains why he thinks recent actions by the PCOB will fall far short of resolving the country's banking problems.

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