Financial Regulatory Forum

ANALYSIS-Investors still see India reform despite mixed year

By Krittivas Mukherjee

NEW DELHI, May 23 (Reuters) – To its admirers, India’s ruling coalition has had a good year — sound fiscal policy to stave off a ruinous global credit crisis, fast growth and some tentative steps toward reforms.

Those are likely to be stressed by Prime Minister Manmohan Singh when he gives a news conference on Monday to mark the coalition’s first year in office.

But to its critics, his government has floundered on inflation, struggled ineffectively against a Maoist insurgency, and managed its political allies so badly its substantial parliamentary majority dwindled, hurting its ability to pass pro-market legislation needed to sustain robust growth.

A sense of bullish self-confidence marked the Congress party-led coalition’s handsome re-election victory last May, spurring hopes of firm governance and quick policy changes.

A slew of crises then undercut that electoral momentum, emboldened the opposition and weakened Congress’s hold on allies.

COLUMN – $2 trillion OTC derivatives may be undercollateralised

– John Kemp is a Reuters market analyst. The views expressed are his own –

By John Kemp

LONDON, April 14 (Reuters) – As much as $2 trillion of over-the-counter derivatives held at the largest banks in the United States, Europe and the rest of the world could be under-collateralised, according to a working paper published by the International Monetary Fund this month.

Banks might have to find $200 billion in initial margin and guarantee funds if standardised contracts are moved into clearing houses, and hold an extra $70 billion to $140 billion in regulatory capital to cover the non-standard contracts they retain on their balance sheets.

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