Contributing Member of the Legal, Economic & Regulatory Affairs Councils

All News Analyses by this Author

Shake-up in the Mortgage Market

May 25, 2009

Analysis of:House Passes Bill Against Predatory Mortgage Lending - The Caucus Blog - NYTimes.com | thecaucus.blogs.nytimes.com

The financial meltdown has had its positive effect - that of transforming markets and making corrections.  The new regulations aim at curbing leverage and encouraging pre-payments.  These regulations will ensure that the mortgage market does not lose in significance and at the same time both lenders and borrowers are protected.  The mortgage market can also take a cue from the factor market wherein the factor who buys the debt of another does a thorough review through the network of factors worldwide.  The factor also tries to involve himself with the other party even before the receivables are generated.  Similar degree of caution and protection is required in the mortgage market.

Cash will remain king

May 25, 2009

Analysis of:Paying With Cash Could Soon Pay Off | online.wsj.com

Changes in the credit card industry will have far reaching implications not only for card issuing banks but also the entire corporate sector.  The entire exercize of working capital management will have to be re-done and liquidity will be given additional prominence.  Purchase managers will come under scrutiny as constantly they will have to answer questions on the rationale of going for credit purchases using company credit cards and how much additional cost it has meant for the company vis-a-vis additional revenue that could have been earned.  Even to provide such data, one has to track down interest rates on bank deposits as well as money market instruments.  Surely, working capital management will become a little more complex.

Unusual times - unusual actions

May 14, 2009

Analysis of:Financial Times FT.com | www.ft.com

It seems like a full circle - now more and more government action is getting recommended in the all important financial sector in countries where capitalism was born and thrived.  Surely, the situation has to be absolutely desperate for even such a recommendation to be made.  The fact that it is being welcomed means that it is total u-turn in thinking, perhaps dictated by survival instinct.  So, the message remains there - it is a short-term measure adopted in an emergency and it must stay this way.  If adhered to, we should not see more bail-outs in the coming days.

slowing acceptance of IFRS by USA

May 13, 2009

Analysis of:CFO's on IFRS: Forget About It | www.cfo.com

Accounting standards are meant to be followed and reviewed.  It looks like adequate review of US GAAP did not take place in the last 20 years.  In the meanwhile, the IASB was very active on this front and used the feedback from industry to revise the standards.  And this process is still going on!  No wonder, then that IFRS has been termed as a moving target.  And this is the genesis - the FASB was concentrating on framing new standards; the IASB was concentrating on reframing previous standards to give more scope for flexibility and transparency in accounts.

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