Friday, October 26, 2007
The retail price of petrol per litre is Rs 73.50 for Kathmandu valley which is dearer by Rs 6.25 from the earlier price of Rs 67.25, according to a press release of NPDA. Similarly, a litre of diesel costs Rs 56.25, dearer by Rs 3.10 and kerosene is Rs 51.02, which is dearer by Rs 3.57 now.
Shiv Prasad Ghimire, president of NPDA, addressing the press meet said that the prices will vary places to places as the private dealers will fix the retail prices after adding their commission in the wholesale prices. "Besides commission, the dealers add shrinkage charge and working loss, insurance and transportation cost, while they fix the retail price," he informed.
The retail price of petrol per litre is at Rs 72.29 from Rs 66.19 for Birgunj. "Similarly, diesel costs Rs 55.03 from Rs 52.03 and kerosene costs Rs 50.12 from earlier Rs 47.17 per litre in Birgunj," according to the NPDA's press note. Whereas in Dipayal, per litre petrol costs Rs 75.66 and kerosene costs Rs 52.94 per litre, the most expensive among all the places."
The retail price is applicable within the 15 km of depos and further than that the price attracts seven per cent transportation cost per km," added Ghimire.
Yesterday, in the late evening press meet, Nepal Oil Corporation (NOC) has raised the prices of petroleum products. Lately, NOC has not only been posting a whopping loss every year, it is also dogged by controversies as there is no transparency in dealing with its sole buyer Indian Oil Corporation (IOC).
Thursday, October 25, 2007
"According to the new price list, kerosene and diesel will be dearer by Rs 3 and petrol by Rs 6 per litre," said Purushottam Ojha, secretary at the ministry of industry, commerce and supplies adding that the price of cooking gas will cost Rs 1100 per cylinder. "There is no change in the price of air turbine fuel (ATF) as it has already been adjusted."
"However, the prices may vary as the private dealers will fix the retail prices after adding their commission in the depo price," Ojha said. Besides commission, the dealers are allowed to charge shrinkage and working loss, insurance and transportation cost while they fix the retail price.
The NOC made a hike on the wholesale prices of all petroleum products citing whopping losses resulted from widening disparity between domestic and international price. "Government has given the freedom to adjust the price of petro-products," said Ojha adding that NOC has been continuously in touch with all the political parties and request their support.
Digamber Jha, acting chairman of the NOC said that the price hike was an obligation to avert a looming crisis on smooth supply of petroleum products.
In August 2006, the government had in a dramatic move scrapped its own decision within 48 hours of hiking prices of all major petroleum products.
NOC had hiked the wholesale price of petrol by Rs 15.77 per litre, diesel by Rs 4.98, kerosene by Rs 10.16 (open), air turbine fuel (ATF) by Rs 21.38 and cooking gas by Rs 100 per cylinder.
However, the cabinet decision has replaced the price hike with the earlier price of Rs 67.25 for petrol, Rs 53.15 for diesel, Rs 47.65 for kerosene, Rs 55 for ATF per litre and Rs 900 for a cylinder of cooking gas.
NOC had in last six months failed to pay many a times the outstanding dues to the Indian Oil Corporation (IOC) that stands at Rs 5 billion, resulting in the drastic cut in the supply lately. Earlier, students and poor people used to get subsidised kerosene. "However, there is no such provision as NOC has a single pricing now," said Ojha adding that the NOC is thinking of fixing separate prices for commercial use and non-commercial usage.
According to NOC, it has been incurring a huge loss of about Rs 400 million a month after the crude price skyrocketed in the international markets and touched a record high of $90 a barrel.
NOC owes about Rs 12 billion in total to various financial institutions in home and its sole supplier IOC.
Tuesday, October 23, 2007
The Basel Committee, established by the central-bank Governors of the Group of Ten countries at the end of 1974, meets regularly four times a year. It has four main working groups which also meet regularly.
The Committee's members come from Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, United Kingdom and United States. Countries are represented by their central bank and also by the authority with formal responsibility for the prudential supervision of banking business where this is not the central bank. The present chairman of the Committee is Nout Wellink, President of the Netherlands Bank, who succeeded Jaime Caruana on 1 July 2006.
The Committee does not possess any formal supranational supervisory authority, and its conclusions do not, and were never intended to, have legal force. Rather, it formulates broad supervisory standards and guidelines and recommends statements of best practice in the expectation that individual authorities will take steps to implement them through detailed arrangements - statutory or otherwise - which are best suited to their own national systems. In this way, the Committee encourages convergence towards common approaches and common standards without attempting detailed harmonisation of member countries' supervisory techniques.
The Committee reports to the central bank Governors of the Group of Ten countries and to the heads of supervisory authorities of these countries where the central bank does not have formal responsibility. It seeks their endorsement for its major initiatives. These decisions cover a very wide range of financial issues. One important objective of the Committee's work has been to close gaps in international supervisory coverage in pursuit of two basic principles: that no foreign banking establishment should escape supervision; and that supervision should be adequate. To achieve this, the Committee has issued a long series of documents since 1975.
In 1988, the Committee decided to introduce a capital measurement system commonly referred to as the Basel Capital Accord. This system provided for the implementation of a credit risk measurement framework with a minimum capital standard of 8% by end-1992. Since 1988, this framework has been progressively introduced not only in member countries but also in virtually all other countries with internationally active banks. In June 1999, the Committee issued a proposal for a revised Capital Adequacy Framework. The proposed capital framework consists of three pillars: minimum capital requirements, which seek to refine the standardised rules set forth in the 1988 Accord; supervisory review of an institution's internal assessment process and capital adequacy; and effective use of disclosure to strengthen market discipline as a complement to supervisory efforts. Following extensive interaction with banks, industry groups and supervisory authorities that are not members of the Committee, the revised framework was issued on 26 June 2004. This text serves as a basis for national rule-making and for banks to complete their preparations for the new framework's implementation.
Over the past few years, the Committee has moved more aggressively to promote sound supervisory standards worldwide. In close collaboration with many non-G10 supervisory authorities, the Committee in 1997 developed a set of "Core Principles for Effective Banking Supervision", which provides a comprehensive blueprint for an effective supervisory system. To facilitate implementation and assessment, the Committee in October 1999 developed the "Core Principles Methodology". The Core Principles and the Methodology were revised recently and released in October 2006.
In order to enable a wider group of countries to be associated with the work being pursued in Basel, the Committee has always encouraged contacts and cooperation between its members and other banking supervisory authorities. It circulates to supervisors throughout the world published and unpublished papers. In many cases, supervisory authorities in non-G10 countries have seen fit publicly to associate themselves with the Committee's initiatives. Contacts have been further strengthened by International Conferences of Banking Supervisors (ICBS) which take place every two years. The last ICBS was held in Mexico in the autumn of 2006.The Committee's Secretariat is provided by the Bank for International Settlements in Basel. The fifteen person Secretariat is mainly staffed by professional supervisors on temporary secondment from member institutions. In addition to undertaking the secretarial work for the Committee and its many expert sub-committees, it stands ready to give advice to supervisory authorities in all countries.
Basel II: Revised international capital framework
The Basel II Framework describes a more comprehensive measure and minimum standard for capital adequacy that national supervisory authorities are now working to implement through domestic rule-making and adoption procedures. It seeks to improve on the existing rules by aligning regulatory capital requirements more closely to the underlying risks that banks face. In addition, the Basel II Framework is intended to promote a more forward-looking approach to capital supervision, one that encourages banks to identify the risks they may face, today and in the future, and to develop or improve their ability to manage those risks. As a result, it is intended to be more flexible and better able to evolve with advances in markets and risk management practices.
The efforts of the Basel Committee on Banking Supervision to revise the standards governing the capital adequacy of internationally active banks achieved a critical milestone in the publication of an agreed text in June 2004.
Basel II: An introduction to the Capital Adequacy Accord and the Capital Requirements Directive. It is based on an international agreement. It was written in February 2006.
Capital requirements rules state that credit institutions, like banks and building societies, must at all times maintain a minimum amount of financial capital, in order to cover the risks to which they are exposed. The aim is to ensure the financial soundness of such institutions, to maintain customer confidence in the solvency of the institutions, to ensure the stability of the financial system at large, and to protect depositors against losses.
The Basel Committee on Banking Supervision was established at the end of 1974 to provide a forum for banking supervisory matters. The Basel Committee is made up of senior officials responsible for banking supervision or financial stability issues in central banks and other authorities in charge of the prudential supervision of banking businesses. Members of the Basel Committee come from Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, the UK and the US.
Although the Basel Committee is not a formal regulatory authority in itself, it has great influence over the supervising authorities in many countries. The hope is that by agreeing basic goals, the Committee can achieve common approaches and common standards across many member countries, without attempting detailed harmonisation of each member country's supervisory techniques.
In 1988, recognising the emergence of larger more global financial services companies, the Committee introduced the Basel Capital Accord (Basel I). This sought to strengthen the soundness and stability of the international banking system by requiring higher capital ratios.
Since 1988, the framework contained in Basel I has been progressively introduced not only in member countries but also in virtually all other countries with active international banks. In June 1999, the Committee issued a proposal for a new Capital Adequacy Framework to replace Basel I. Following extensive communication with banks and industry groups, the revised framework was issued on 26th June 2004 and is known as Basel II.
Basel II basics
The objective of Basel II is to modernise the existing capital requirements framework to make it more comprehensive and risk-sensitive, taking account of many modern financial institutions' thorough risk management practices.
The Basel II framework is therefore more sensitive to the real risks that firms face. As well as looking at financial figures, such as how much money the firm controls, it also considers operational risks, such as the risk of systems breaking down or people doing the wrong things.
It reflects improvements in firms' risk management practices, for example by the introduction of the internal ratings based approach ( IRB ). The IRB approach allows firms to rely to a certain extent on their own estimates of credit risk. It also introduced the Advanced Measurement Approach ( AMA ) which allows firms to take account of their operational risks in assessing capital adequacy.
A key aspect of the new framework is its flexibility. It provides institutions with the opportunity to adopt the approaches most appropriate to their situation and to the sophistication of their risk management.
The Basel II framework consists of three 'pillars':
* Pillar 1 sets out the minimum capital requirements firms will be required to meet to cover credit, market and operational risk.
* The rules under Pillar 2 create a new supervisory review process. This requires financial institutions to have their own internal processes to assess their capital needs and appoint supervisors to evaluate an institutions' overall risk profile, to ensure that they hold adequate capital.
* The aim of Pillar 3 is to improve market discipline by requiring firms to publish certain details of their risks, capital and risk management.
Basel II and the Capital Requirements Directive
Basel II applies to internationally-active banks. In the European Union, the new capital requirements framework is being implemented through the Capital Requirements Directive ( CRD ). The CRD will directly affect certain types of investment firms and all deposit-takers (including banks and building societies), except credit unions.
The framework under the CRD reflects the flexible structure and the major components of Basel II. It has been based on the three 'pillars', but has been tailored to the specific features of the EU market. Member States must apply the Directive from the start of 2007, but the more sophisticated risk measurement approaches won't be available until 2008. The CRD is not a stand-alone directive, rather it implements the new framework by making significant changes to two existing directives: the Banking Consolidation Directive and the Capital Adequacy Directive, both of which were based on Basel I.
In the UK , the Financial Services Authority ( FSA ) is working with the Basel Committee, the EU and the banking industry to develop its policies for implementing the new capital adequacy framework via the Capital Requirements Directive.
Measuring operational risk
One of the key changes in Basel II is the addition of an operational risk measurement to the calculation of minimum capital requirements. This has been included in the CRD . Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk, such as exposure to fines, penalties and private settlements. It does not, however, include strategic or reputational risk.
In February 2003, the Basel Committee published guidance on the Sound Practices for the Management and Supervision of Operational Risk (20-page / 101KB PDF). In this guidance, the Committee recognised that developing banking practices and the growing sophistication of financial technology meant that banks were facing new and more complex risks other than credit and market risk.
For example, the greater use of more highly automated technology and a greater reliance on globally integrated systems transforms risks from manual processing errors to system failure. The growth of e-commerce brings risks such as internal and external fraud and system security issues. The emergence of banks acting as large-volume service providers creates the need for continual maintenance of high-grade internal controls and back-up systems. The growing use of outsourcing arrangements and the participation in clearing and settlement systems can mitigate some risks but can also present significant other risks to banks. The Committee listed a number of operational risk events which were identified (with co-operation from the industry) as having the potential to result in substantial losses:
* Internal fraud - for example, intentional misreporting of positions, employee theft, and insider trading on an employee's own account.
* External fraud - for example, robbery, forgery, cheque kiting, and damage from computer hacking.
* Employment practices and workplace safety - for example, workers compensation claims, violation of employee health and safety rules, organised labour activities and discrimination claims.
* Clients, products and business practices - for example, misuse of confidential customer information, improper trading activities on the bank's account, money laundering, and sale of unauthorised products.
* Damage to physical assets - for example, terrorism, vandalism, earthquakes, fires and floods.
* Business disruption and system failures - for example, hardware and software failures, telecommunication problems, and power failures.
* Execution, delivery and process management - for example, data entry errors, incomplete legal documentation and unapproved access given to client accounts.
Three approaches for calculating capital adequacy
In calculating operational risk capital charges, Basel II and the CRD set out three different methods which may be adopted:
* The Basic Indicator Approach
* The Standardised Approach
* The Advanced Measurement Approach
The Basic Indicator Approach is the simplest of the three approaches, and will be the default option for most firms. It applies a relatively straightforward calculation based on the firms' income to determine its capital requirements.
The Standardised Approach again relies on calculations based on income, but with different percentages applying across different business lines. To be able to take advantage of the Standardised Approach firms will have to meet certain qualifying criteria.
The Advanced Measurement Approach is the most complicated of the three options. Under this approach, each firm calculates it own capital requirements, by developing and applying its own internal risk measurement system. As with the Standardised Approach the firm must meet certain qualifying criteria, and the risk measurement system must be validated by the FSA before it will be allowed to take advantage of the AMA.
The Advanced Measurement Approach (AMA)
In its consultation paper Strengthening Capital Standards, the FSA stated that given the "potential reduction in capital for firms that qualify for the AMA , we will be looking for evidence that carefully thought-through plans for improving systems in such firms will deliver high standards of risk management and monitoring".
In addition to the general risk management standards which firms employ, a firm must meet certain qualifying criteria to use the AMA :
* The firm's internal operational risk measurement system must be closely integrated into its day-to-day risk management processes. The FSA will be looking, for example, at whether the purpose and the use of the risk management system is limited to determining regulatory capital and whether the use of the system provides tangible benefits to the organisation.
* There must be regular reporting of operational risk exposures and loss experience, and the firm must have procedures for taking appropriate corrective action.
* The firm's risk management system must be well documented. The firm should have routines in place for ensuring compliance and policies for the treatment of non-compliance.
* The operational risk management processes and measurement systems shall be subject to regular reviews performed by internal and/or external auditors.
* The FSA is required to validate the operational risk measurement system including verifying that the internal validation processes operate in a satisfactory manner and ensuring that data flows and processes associated with the risk measurement system are transparent and accessible.
* The FSA requires each firm to show that it has a credible risk management system. It must show that the assumptions, techniques and practices used are appropriate and relevant to managing operational risk in the business. The firm should also be able to show how the individual parts (whether inputs or outputs) of the risk management system are used in the management of operational risk. A firm must be able to demonstrate that data inputs are accurate, reliable and credible and that the firm's validation techniques are robust.
* The operational risk management system should include the following elements: internal loss data; external data; scenario analysis (to evaluate the firm's exposure to high severity risk events); and key business environment and internal control factors (that could change the firm's operational risk profile). The FSA has said that while firms must consider all four elements, they do not necessarily have to consider each in the same way or to give them equal weight, provided that the firm can justify its approach.
General Risk Management Standards
It is sometimes too easy to concentrate on the operational risk standards which apply if firms want to benefit from the AMA . However, the CRD requires firms to have robust governance arrangements for all risks including operational risks. These should include:
* a clear organisational structure with well defined, transparent and consistent lines of responsibility;
* effective processes to identify, manage, monitor and report the risks it is or might be exposed to; and
* adequate internal control mechanisms, including sound administrative and accounting procedures.
The content of these arrangements, processes and mechanisms must be comprehensive and proportionate to the nature, scale and complexity of the firms' activities.
The CRD also requires that firms should have sound, effective and complete strategies and processes to assess and maintain on an ongoing basis the amounts, types and distribution of internal capital that they consider adequate to cover the nature and level of the risks to which they are or might be exposed. These strategies and process should be subject to regular internal review to ensure they remain comprehensive and proportionate to the nature, scale and complexity of the firms' activities.
Saturday, October 20, 2007
The swanky end of Connecticut Avenue in Washington DC might not seem the right place to find the offices of Alan Greenspan. As the most powerful figure in the international economy for the 18 years that he presided overthe US Federal Reserve, Greenspan's gnomic remarks made him a household name - but hardly a celebrity.
Close to such upmarket retailers as Burberry and Brooks Brothers, Greenspan works above a branch of Filene's Basement, a chain famous for its bargains and an annual event known as "the running of the brides", whendesigner wedding gowns are sold so cheaply that in 1992 one store's racks were cleared in 37 seconds.
Now aged 81, and with his memoir-cum-tour of the economic horizon The Age of Turbulence published this week, Greenspan is indulging in one luxury he never allowed himself in office - talking on the record to journalists and appearing on chatshows, a rarity for a man who once remarked, and not in jest: "If I turn out to be particularly clear, you've probably misunderstood what I've said." Since the publication of his book has coincided with a period of turbulence in the markets, with the Federal Reserve announcing a sharp cut in US interest rates on Thursday, people have been queueing to hear what Greenspan has to say. His warning that Britain faces rising interest rates and inflation made headlines earlier this week, and on September 20 he talked to the London Guardian about the difficulties facing the Bank of England governor Mervyn King, pledging support and saying he believes King deserves to be reappointed when his current five-year term comes to an end.
He sympathises with the central bankers in the current credit crisis, arguing that scenes such as the queues outside the British bank Northern Rock?s branches earlier this week pose real challenges for policymakers, who must respond to both "those who have had very prudent investment policies, but also those who are very egregious speculators, who deserve to be punished". The difficulty, he argues, is that "in order to punish those who are undeserving, you have to punish the whole economy and the deserving".
This week's dramas notwithstanding, he still believes the US is at greater risk of recession than the UK, and has some reassuring words for British homeowners. "So far, consumer spending is holding up more than the economic models would suggest. Most people's suspicion is that that is not going to continue. We have very significant downside potential in house prices here [in the US], which is not true in Britain." His book includes some surprising conclusions for a man who describes himself as a "lifelong Republican libertarian". He comes out against widening income inequality in the US, arguing that it could spark a backlash andlead to "cultural ties" being undone. He calls for reform of the US school system, and for more immigration of skilled workers. And in the interview he refers to his fears over climate change, saying "I acknowledge unequivocally that we have a very serious problem" and arguing that politicians must take the initiative: "The purpose of a politician is to be a leader. A politician has to lead. Otherwise he's just a follower." It's hard to avoid the impression that Greenspan would still love to havehis hand on the tiller. What he professes to miss most are the small, intense meetings in his office. His public image is of someone happiest when he is poring over the latest data on industrial productivity, and he certainly knew the value of cultivating a geekish image during his term as Fed chairman. This is a man who delayed his honeymoon for two months because of work. "I studied my calendar and suggested adding a honeymoon tothe tail end of an international monetary conference in Switzerland," he writes in his memoir.
But there is more glamour to Greenspan than such stories suggest. Take the guest list for his 50th birthday party in 1976: it included Este Lauder, Brooke Astor, Oscar de la Renta and Henry Kissinger. Greenspan was then dating Barbara Walters, one of the most famous television presenters in America.
In his youth in the 1940s, Greenspan studied music at New York's prestigious Julliard conservatory and went on to be a full-time musician inthe big-band era. While other band members smoked pot, he recalls, he would complete their tax returns for them. Eventually he gave up music tostudy economics - not quite running away from the circus to become an accountant, but getting close.
Greenspan began as an adept operator within the Republican party. He was an advisor to Richard Nixon before the 1968 election, and worked closely with six US presidents, and judges Nixon and Bill Clinton to have been the smartest - "I would say more specifically the highest IQ, becausesmart implies wisdom," he offers in clarification. He nearly accepted a post in the White House under Nixon - until he spotted the fatal flaw in Nixon's personality. Shortly before the Republican convention in 1968, Nixon's campaign convened a meeting near New York. When Nixon arrived he was in a fit of rage. "His speech was so intense and so laced with profanity that it would have made Tony Soprano blush," Greenspan recalls. "I was shocked by it. My whole relationship had been with this staid former vice-president, who spoke in full sentences with perfect syntax. His thoughts were extraordinarily well arranged and he was indisposed to using any four-letter words. And then we go into that meeting, and it was a different man. I'd never confronted something like that before - and I was in myforties, for God's sake." As a result, Greenspan concentrated on building his economic consultancy until the day Nixon resigned, when he agreed to work for Gerald Ford alongside Donald Rumsfeld and Dick Cheney. "I do not know of two more informed and technically superior executives than Rumsfeld and Cheney," he says."They did a superb job." There's a palpable sense of disappointment in the way Greenspan talks about the Bush administration. He had high hopes of working with Rumsfeld and Cheney again, but the reality was very different. Sticking rigidly to pre-election plans, Bush's team ignored shrinking revenues and pushed ahead with tax cuts while allowing spending to balloon out of control.
"It was a Republican party more interested in cementing control rather than implementing policy," he says. "They had the presidency and control of both houses [of Congress] and a budget surplus, and a very capablegroup of people." So what went wrong? He shakes his head ruefully: "I don't know." Greenspan's disdain for the post-2000 Republican party is matched by his admiration for the Clinton administration, though of Clinton himself he says: "There's a certain odd indiscipline about him. It's where the MonicaLewinsky stuff came from. When I heard about that, I said it's not possible. I dismissed it out of hand. So there's something about Clinton which I don't understand. But where I had dealings with him, and I got to see a good deal of him, there was extraordinary intelligence." More surprising, perhaps, is the emphasis Greenspan places on the influence of Ayn Rand, a Russian writer whose bleakly individualistic view of mankind has inspired some and unsettled others. He calls Rand, to whom he was introduced by his first wife in 1953, a "stabilising force in my life", and writes: "I was intellectually limited until I met her." Other forces shaping Alan Greenspan's life and work may be more obscure. When he was a child his parents separated, "before I can remember", and his father, Herbert, a smalltime stockbroker in the midst of the great depression, left behind a gift of a book on investment he had written, optimistically entitled Recovery Ahead!. The inscription, which Greenspan transcribes in his book, reads: "To my son Alan. May this my initial effort with constant thought of you branch out into an endless chain of similar efforts so that at your maturity you may look back and endeavor to interpret the reasoning behind these logical forecasts and begin a like work of your own." Aged nine, Greenspan says, "I was totally mystified." It is only after I leave his office that I realise that this is more or less how Alan Greenspan turned out: an endless chain of logical forecasts.
Thursday, October 18, 2007
Wide Area Network (WAN). Due to this extended
facility, now stock brokers donot have to go to the
Nepse floor, they can place order, sell or buy shares
from their office.
In the first-phase; some brokers; stock broker number
19, Umesh Regmi, started from the Sunday; stock broker
number 14 started from Monday; and stock broker number
11 started trading from Wednesday. Stock broker number
28 and stock broker number 32 has started trading from
"The brokers, who have pre-requisites, according to
Nepse's guidance, will get access," says Rewat Bahadur
Karki, managing director of the Nepal Stock Exchange
(Nepse), adding that within one month Nepse will
provide real time information and will work towards
making online trading possible.
"It will be lot easier to work from the office,
clients can get immediate information, can be better
served, and orders can be placed immediately," said
Rabindra Pradhan, stock broker number 32, who started
the trading via WAN from today.
Agreed Umesh Regmi, the first broker, who started
trading via WAN "Clients get better service and it
saves our time."
However, Nepse has set some basic pre-requisites for
trading from office via WAN. A broker must have a
price-board, separate rooms along with separate
computers for clients, order entry, settlement and
must provide up-to-date information to the clients
like in the Nepse floor.
"The broker must have a separate trading room, where
investors should not have any access," Karki said
adding that the number of brokers can now be increased
to more that the capacity of the floor, which is 50 only.
Wednesday, October 17, 2007
2006 - Edmund S. Phelps
2005 - Robert J. Aumann, Thomas C. Schelling
2004 - Finn E. Kydland, Edward C. Prescott
2003 - Robert F. Engle III, Clive W.J. Granger
2002 - Daniel Kahneman, Vernon L. Smith
2001 - George A. Akerlof, A. Michael Spence, Joseph E. Stiglitz
2000 - James J. Heckman, Daniel L. McFadden
1999 - Robert A. Mundell
1998 - Amartya Sen
1997 - Robert C. Merton, Myron S. Scholes
1996 - James A. Mirrlees, William Vickrey
1995 - Robert E. Lucas Jr.
1994 - John C. Harsanyi, John F. Nash Jr., Reinhard Selten
1993 - Robert W. Fogel, Douglass C. North
1992 - Gary S. Becker
1991 - Ronald H. Coase
1990 - Harry M. Markowitz, Merton H. Miller, William F. Sharpe
1989 - Trygve Haavelmo
1988 - Maurice Allais
1987 - Robert M. Solow
1986 - James M. Buchanan Jr.
1985 - Franco Modigliani
1984 - Richard Stone
1983 - Gerard Debreu
1982 - George J. Stigler
1981 - James Tobin
1980 - Lawrence R. Klein
1979 - Theodore W. Schultz, Sir Arthur Lewis
1978 - Herbert A. Simon
1977 - Bertil Ohlin, James E. Meade
1976 - Milton Friedman
1975 - Leonid Vitaliyevich Kantorovich, Tjalling C. Koopmans
1974 - Gunnar Myrdal, Friedrich August von Hayek
1973 - Wassily Leontief
1972 - John R. Hicks, Kenneth J. Arrow
1971 - Simon Kuznets
1970 - Paul A. Samuelson
1969 - Ragnar Frisch, Jan Tinbergen
Sunday, October 14, 2007
Trading at the Nepal Stock Exchange (Nepse) — the sole secondary market of the country — floor suspended twice on Monday due to fall in the Nepse index — first by 20 points and later by 25 points. It lost 25.46 points or 2.83 per cent to 873.92 points at the closing of trading on Monday from the opening 899.38 points.
Similarly, Nepse has been suspended twice on Tuesday due to decrease in its index. The Nepse lost 25.80 points or 2.95 per cent to 848.12 points on Tuesday.
According to new rule, the trading will be suspended for half an hour if the index goes down or up by 15 points or three per cent from previous day’s transactions within half an hour of the trading.Similarly, the trading will be suspended for another half an hour, if the index goes down or up by 20 points or four per cent within the half an hour after the transaction begins. If the index continues to go down or up by 25 points or five per cent, within yet another half an hour of the transaction, the trading will be suspended for the whole day.
Rewat Bahadur Karki, managing director of Nepse hoped that the rule will stabilise the market. “Huge changes, either upward or downward, will affect the market,” he said adding that it is necessary for the sound growth of the secondary market.
Similarly, the trading was suspended twice on Thursday, the last day of the trading as the Nepse ‘unexpectedly’ bounced back. Nepse gained 28.41 points or 3.39 per cent to register 866.13 points on Thursday.
After the central bank’s directive to commercial banks on Sunday to curtail the margin lending to 50 per cent that is said to be one of the reasons of unnatural price hike, the market was expected to cool down, but Nepse tried to prove wrong by ‘unexpectedly rising’ on the last day.
The central bank has also tried to make sufficient flow of shares — as short-supply has been considered another reason in fuelling price hike — by easing rul-es for the promoters to sell their shares in the secondary market.
This week Nepse lost 33.25 points in its index to 866.13 in the weekly trading. The total number of transaction stands at 1617 and total units of shares traded throughout the week stands at 7,40,764 for Rs 380.51 million. Out of the total transactions, transaction of companies under ‘A’ class occupies 53.10 per cent.
National Hydropower topped the list in terms of monetary value and Gurkha Development Bank topped in terms of number of transactions with 155 transactions this week.
“We should work towards developed and prosperous Nepal,” said Upendra Mahato, president of the NRN-International Coordination Council adding that NRNs envision a Nepal that is rich in its century-old culture, heritage and civilisation. “Any type of system that doesnot make its people prosperous will ultimately fail,” he said.
Nepal can catapult into a prosperous country within 10-years provided the government take decision on time. “Time is valuable and the decision not taken on time might not bring desired result,” said the president of the organisation that claims to have invested around $300 million in Nepal till date.
Two commercial banks; Bank of Asia and Sunrise Bank, started their operations from October 12 making the total number of commercial banks in operation at 23.
Similarly, two more development banks; Country Development Bank (CDB) based in Banepa and Kasthamandap Development Bank (KDB) based in Kathmandu, also started their operations from today.
Bharatmani Sharma Risal is the founding chairman and Uday Lal Raj is the managing director (MD) of the CDB and Samundra Kaji Shrestha, Bishnu Sundar Rimal and Mohan Bahadur Thapa are the Board of Directors.
The authorised capital of Country Development Bank is Rs 200 million, while Rs 100 million is issued capital and Rs 51 million is paid-up capital. The bank aims to float shares to the general public of Rs 49 million."
Due to Nepal Rastra Bank’s (NRB) directive, those financial institutions that have already registered must get operating licence within the month of Ashwin or they will betreated like the new ones," Bhishma Raj Chalise, chief operating officer (COO) of KDB says explaining the reason of the sudden flood of banks.
Jagannath Gyawali is the chairman and Krishna Gyawali is the director of KDB, where there are 23 promoters. On one hand, data from NRB shows that only 20 per cent of the populace have access to banking services leaving the vast majority out of the banking reach. And on the other hand, all the banks though they claim of going to rural areas are urban-centric and promise to provide modern banking services.
"There has been no market expansion and the banks are operating on very thin-margin," says one banker adding that the size of the market should rise and the banks explore new areas of investment.As the market is not growing in proportion to the number of players in this field, banking yield has also gone down.
The cut-throat competition has also given rise to unhealthy practise like ‘stealing’ the customers and staff.Both the new commercial banks have Rs 2 billion authorised capital and Rs 1 billion issued capital — 70 per cent promoters and 30 per cent public.
T M Duggar group is one of the promoters of Sunrise Bank, while Shangai group and Bishal group are the major promoters of Bank of Asia.
NRB has lately awarded licence to operate commercial banks and development banks after increasing their authorised capital, for commercial banks Rs 2 billion and fordevelopment banks Rs 640 million. But with the increasing number of financial institutions, NRB has to increase its supervisory capacity also, which is going to be a major challenge.
The more number of commercial banks means the more difficult it will be for the NRB to supervise promptly.
"The other factor that no one has questioned till date is why all the business houses want to own bank. Banks should be operated by the professionals. Each of the business houses in Nepal owns a bank," says one banking professional adding that Nepal Bangladesh Bank should be an eye-opener for the public, supervisory authority and ‘yes of course’ to the court.
"The trend cannot be said healthy," he adds.
KATHMANDU: Nepal Development Bank (NDB) has refuted the allegations NRB has made against it by organising a press meet on Friday. "We are not a troubled-bank like the NRB has alleged us," says Prabhukeshar Man Pradhan, chief executive officer of the bank adding that it has been following the NRB’s directives. NRB, the regulatory authority, has directed NDB to follow its directives as NDB has been found troubled. NRB has earlier also intervined in the Nepal Bangladesh bank to protect depositors' savings. NRB must be strict on the issue of depositors otherwise, noone will tomorrow deposite in any bank. NRB must intervine in the troubled banks.
Thursday, October 11, 2007
It lost 25.46 points or 2.83 per cent to 873.92 points at the closing of the day today from the opening 899.38 points. Banking sub-index also lost 36.67 points to 964.18 points.
The central bank has directed the commercial banks, yesterday to curtail margin lending to 50 per cent — which is said to be fuelling the price hike — from at around 70 to 75 per cent currently. On Sunday, the Nepse has brought the new diresctive. Nepse dropped by less than one points on Sunday.
Rewat Bahadur Karki, managing director of the Nepse says that share price was scaling high due to short supply of shares also. “Now with the new directives, no permission is needed to sell promoters shares that will create a good supply,” he says adding that margin lending in the secondary market was yet another reason for ‘unnatural’ price hike.
The market will cool down, market experts predict adding that it will also expand and stabilise as promoters can now sell their shares in the secondary market. According to the central bank’s directive, to buy the promoters’ shares one should not be black-listed and no-permission from the NRB needed, like before. The NRB has also directed to sell cross holding shares by 2065 Asad in the secondary market. The central bank has also raised the cap to 50 per cent from earlier 25 per cent on investment in hydro power projects.
Nepse has again been suspended twice on Tuesday due to decrease in its index — first by 20 points and later by 25 points — from Monday. The Nepse lost 25.80 points or 2.95 per cent to 848.12 points. Banking sub-index also lost 39.48 points or 4.09 per cent to 924.70 points.
On Wednesday Nepse cooled down a bit and lost only 10.05 points and settled at 837.72 points.
Both the banks, which have Rs 2 billion authorised capital and Rs 1 billion issued capital — 70 per cent promoters and 30 per cent public — are promoted by prominent business groups."Sunrise Bank aims to be one of the leading banks by 2012," says Kishore Maharjan, CEO of the Sunrise Bank adding that the mission of the bank is to deliver the taste of modern banking services.T M Duggar group is one of the promoters of Sunrise Bank.
Similarly, Shangai group and Bishal group are the major promoters of Bank of Asia that aims at providing quality services on demand-based approach.
Three more banks got the approval from the board of Nepal Rastra Bank (NRB) this week making the total number of commercial banks to 26.
"NRB cannot stop any one, if they apply according to the rule," says Krishna Bahadur Manandhar, acting governor of the NRB. But with the increasing number of financial institutions, NRB has to increase its supervisory capacity, which is a major challenge.
The more number of commercial banks means the more difficult it will be for the NRB to supervise promptly.The market is not growing in proportion to the number of players that has been increasing in geometrical proportion recently. The banking yield has gone down because of cut-throat competition.When 2010 opens up market for international players, according to the WTO norms, the local banks will find it difficult to compete with them.
On one hand, data from NRB shows that only 20 per cent of the populace have access to banking services leaving the vast majority out of the banking reach. And on the other, all the banks are urban-centric.
Monday, October 8, 2007
1. Nepal Bank Limited - 1937/11/15 - Kathmandu - Rs 380.38 million
2. Rastriya Banijya Bank - 1966/01/23 - Kthmandu - Rs 1,172.30 million
3. NABIL Bank Ltd - 1984/07/16 - Kathmandu - Rs 491.65 million
4. Nepal Investment Bank Ltd - 1986/02/27 - Kathmandu - Rs 801.35 million
5. Standard Chartered Bank Nepal Ltd - 1987/01/30 - Kathmandu - Rs 413.25 million
6. Himalayan Bank Limited - 1993/01/18 - Kathmandu - Rs 810.81 million
7. Nepal SBI Bank Limited - 1993/07/07 - Kathmandu - Rs 647.80 million
8. Nepal Bangladesh Bank Limited - 1993/06/05 - Kathmandu - Rs 719.85 million
9. Everest Bank Limited - 1994/10/18 - Kathmandu - Rs 518.00 million
10. Bank of Kathmandu Limited - 1995/03/12- Kathmandu - Rs 603.14 million
11. Nepal Credit and Commerce Bank Limited - 1996/10/14 - Siddharthanagar - Rs 698.81 million
12. Lumbini Bank Limited - 1998/07/17 - Narayangadh - Rs 600.00 million
13. Nepal Industrial & Commercial Bank Limited - 1998/07/21 - Biaratnagar - Rs 660.00 million
14. Machhapuchhre Bank Limited - 2000/10/03 - Pokhara - Rs 821.65 million
15. Kumari Bank Limited - 2001/04/03 - Kathmandu - Rs 750.00 million
16. Laxmi Bank Limited - 2002/04/03 - Birgunj - Rs 729.70 million
17. Siddhartha Bank Limited - 2002/12/24 - Kathmandu - Rs 600.00 million
18. Agriculture Development Bank Ltd - 2068/10/19 - Kathmandu Rs 6,478.01 million
19. Global Bank Ltd - 2007/01/02 - Birgunj, Parsa - Rs 510.00 million
20. Citizens Bank International Ltd - 2007/6/21 - Kathmandu - Rs 560.00 million