I am utterly bored...

"Money is like manure. It only works when you spread it everywhere".
--Henry Kissinger

"Take care of your pennies; pounds will take kare of themselves"
-- Old saying

"There are wise and then there are otherwise"
--wise saying

Some great lines... from the holy sire

1) maaya maanusha yaovvana garvam
harathi nimisha kaalaa sarvam
(Sanskrit) - Aadi Sankaracharya Swami

(The pride associated with your youth is only a mirage. It eats away minute by minute and with that your whole time)

2) Chitram vatatarormooleh
Vriddhaat sishyaan gururyuvaan
Gurostumounam vyaakhyaanam
Sishyaastu chinnasamshayaat
(Sanskrit)- Aadi Sankaracharya Swami

(Aha! what a strange thing! Under the banyan tree are sitting the teacher who is in his tender age and his disciples who are all frail, senile persons. The teacher is all silence; yet he is able to obliterate all their doubts)

Life antonym-ized ;-)

Today's breakfast was an enriching one. Adil said there are three kinds of people according to oneself. People whom you like, people whom you dislike and of course the unfortunate ones whom you do not care for.

To add to it, I would say, there are instances when you would like to tell someone, "love me or hate me, but don't stay indifferent to me". Luckily, till now (apart from few forgettable aberrations) all the linkages had been of the first two kinds :D

There are three kinds of feelings you can have towards someone you know. The noblest - you love them; the ordinary - you hate them; and then the worst - you are sypmathetic towards them. I think I am the kind of person, who can forgive even his enemies but not someone who is sympathetic towards me. So be ware of such notions in future ;-)

What's life without enemies? Even Yudhishtira (mahabharata fame ;-) ) could not remain an Ajaatashatruvu. There is the catch. You know about Yudhishtira (the love) only because there was a duryodhana (the hate) and more so because you felt both of them strongly before.

You must know how to hate, to learn how to love. But then, once you know what love is; could you ever hate anyone anymore?

In a fair world foreseen by Basel committee...

there seem to be too many inadequacies. I would like to address few issues (factual and personal) related to the recommendations made by the Basle committee through this blog. This is just for those who are interested in banking. Its serious stuff mate.

Its been more than six months that Basel II amendment has hit the banking market. “Basel II embraces a comprehensive approach to risk management and bank supervision”; thus spake Mr Jean-Claude Trichet, chairman of the G10 group comprising the Basel com (also the chairman of the European Banking Com). It sure does trichi baba. More about it later.

Basel com. was convened in 1988 and comprises a set of 10 developed countries as its governing members. There are countries like Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, United Kingdom, and the United States from where the representatives are selected. So, thats the group that decides what's the capital a dadar-da-bank in mumbai should hold as buffer. Funny yet true.

The purpose of the Basel com. till 1996 was two fold:
1) To set minimum capital requirements for banks in the countries mentioned above
2) To achieve a standard for defining bank related risk

Till 1996, the com. has limited its horizon only to credit risk but not anymore. Now, it also includes the market and operational risk for which the capital allocation has to be made. Why do we need capital allocation in the first place? Just to bail out of unexpected losses and avoid bank runs.

Motorola coined the term 3-sigma in 90's (or 80's?). But come to think of it; the Indian banking system has operated probably at even more efficient levels (no depositor would have ever returned back emptyhanded) of quality (in terms of meeting the service expections prevailing then) for several decades. Thats the beauty (yet complex) of banking industry... the accountability of dealing with others' money and the ensuing motivation to serve every client without any glitch. So, its all about motivation mate; you can even operate at 100-sigma.

Though the Basel com. recommendations were limited to the G10 countries for quite a while, gradually other countries too acknowledged it as a benchmark measure seeing its potential. Currently there are more than 100 countries which adopted this concept in their domestic banking system. This is where I have a problem. How can consistency and standardisation of definitions (banking and related risk) be achieved across countries like USA, Japan and countries like Chile, Nigeria, Nepal etc? There are obvious anomalies that could arise because of the economic, demographic and cultural disparities that exist between a developed nation and a developing one. The standardisation problem comes only when you engage in international transactions (and they hold the max. proportion in your B/S and P/L). But in developing economies, the primary duty of banks had been to engage in domestic priority sector lending and other developmental activities. In developing economies hazaar population is still illiterate. The countries lack basic infrastructure to let the banks share the creditworthiness information of their clients. Can standardisation be achieved in such a pithy state?

First they have defined a developing country, then as an afterthought (???) came the word developed country. After doing this much, they had to differentiate the two. They came up with several fancy definitions and standards which pose questions to most of the developing countries. There they are, mocking at us, when we are unable to catch up with their fancy manifestations. They put caveats and riders all through. They warn us to meet the Basel standards; otherwise the WB/IMF loans would not be made available to us. Sounds like a benign patriachal suggestion - or is it a deceitful one to justify their definitions? But just remember, none of the third world countries have a representation on those two eminent boards too (WB/IMF). Laughing away more....

Never mind... I will return to facts from the fancy world of mine. The current amendment of Basel committee framework for risk capital allocation comprises of three pillars :-))

1) Flexibility: You can now align the minimum capital requirements more closely to each bank's actual risk of economic loss (source: www.bis.org). If your trasactions involving credit risk are less complex forms of lending and credit underwriting etc, then you are free to use any external measure to assess the credit quality of your clients. If your transactions are complex, then you can use combination of an internal ratings based (IRB) approach and an external measure, however, subject to strict data, process and operational validation.
The new system also charges risk capital for potential failures because of people, processes and systems including any external events. This ensures capital against operational risk is in place.
2) Supervision: This is more about the regulators and the bank management supervising whether their country's member banks are maintianing the requisite risk capital or not. The supervisors can engage banks in dialogue regarding their internal processess and how they can be improved, thus creating a competitive scenario for ensuing incentives.
3) Transperancy: It puts the onus on the banks to maintain more transperancy in public disclosures. This helps customers to know more about the entity with whom they are transacting with and hence take an informed decision. This hands over the reins to the customers. As Sam Walton said (re phrased): "Customer is the king, he can kill you just by shopping elsewhere". Very true; feels the Basel com.

These sound great indeed. But again... can this be achieved in a third world country; is the more pertinent question.

An Aimless Odyssey

What's in it for me? I chose to blog when I realised its uses. Before going to its uses let me share the general blog dynamics with you. I am keying them down after observing the general blogging trends followed by several of my friends who blog.

1) I think (no I believe :D) I am a good writer. I write. I publish (internet offers free viewings and the ensuing free publicity). I tell few friends. They read. They comment. I visit my blog a thousand times a day. When I do this for few tens of thousands of times myself, you can find my blog on google.
2) Then its the self fulfilling prophecy at its heights. People casually visit my blog to see if I have written anything new (how good or bad it is). But I never realise, they never read what I write. Its something like the way you brush in the morning. Before you come to your senses you are done. (I always tried to consciously enjoy by morning tooth brushing. But could never remember it in the morning... More about such exciting blogs later). But you still brush. So you involuntarily open my page.
3) The cycle goes on... till another reader_cum_non-blogger (like myself_few_moments_ago) gets inpired and sets his finger into this this fancy blogging pie.

Now that we have learnt a lot about blog mechanics, let us learn about the advantages of blogging.
1) I can be bold on a blog. Through blogging I can shy away from my inertia to say things in person to people. Just blog to be bold. So, the first lesson is - if you are shy, start blogging.
2) I can gorge my yearning for a compliment, by reading your comments. If the comment is positive, I am happy that I have a fan. If I the comment is negative, My options are doubled: First, I reply your comment to induce you to comment more. Second, if I dont udnerstand your comment, I am at least happy - you have read my blog :-). Second lesson - Sate your cravings for a compliment.
3) You can induce others to read your blogs or at least open your page. Then you can start communicating with them in a surrepititous manner. It is for only those for whom it is meant. These are dedicated blogs. Lesson three - One-One function in disguise.


The last use is the best use. You can even propose to a girl in this manner. Trust me. People have tried this avenue too :D.

Ok whats the next step? I am going to search my blog name on google... I have kept some targets too. I am going to open this page 100 times tomorrow. Will tell my friends to do it too.

Tata...