The new Basel accord and developing countries: problems and alternatives

The new Basel Accord framework relies on markets and supervisors to discipline banks. Yet both markets and supervisors fail, and more so in developing countries than in high-income countries. Therefore, the new Accord is not, as its designers claim, suitable for wide application. Nevertheless, developing country policymakers have little choice but to implement it in part or in whole. Hence there are problems of governance in international regulation. I offer seven general principles for the design of a prudential regime more robust to government and market failure. Four alternative capital regimes are evaluated in the light of these principles. Simpler and harsher regimes are likely to achieve greater safety with a given level of resources

OTC Derivatives Market in India: Recent Regulatory Initiatives and Open Issues for Market Stability and Development

The OTC derivatives markets all over the world have shown tremendous growth inrecent years. In the wake of the present financial crisis, which is believed to have beenexacerbated by OTC derivatives, increasing attention is being paid to analysing theregulatory environment of these markets. In this context, we analyse the regulatoryframework of the OTC derivatives market in India. The paper, inter alia, seeks toprove the point that the Indian OTC derivatives markets, unlike many otherjurisdictions, are well regulated. Only contracts where one party to the contract is anRBI regulated entity are considered legally valid in India. A good reporting systemand a post-trade clearing and settlement system, through a centralised counter party,has ensured good surveillance of the systemic risks in the Indian OTC market.From amongst the various OTC derivatives markets permitted in India, interest rateswaps and foreign currency forwards are the two prominent markets. However, byinternational standards, the total size of the Indian OTC derivatives markets stillremains small because credit default swaps were conspicuously absent in India untilnow. It appears that Indian OTC derivatives markets will grow fast once again afterthe present financial crisis is over. This research paper explores those open issues thatare important to ensure market stability and development. On the issue of the muchdiscussed competition between exchange-traded and OTC-traded derivatives, webelieve that the two markets serve different purposes and would contribute more torisk management and market efficiency, if viewed as complementary. Regarding theintroduction of new derivative products for credit risk transfer, the recentannouncement by the RBI that it would introduce credit default swaps is a welcomesign. We believe that routing of credit default swaps through a reporting platform andmanaging its post-trade activities through a centralised counterparty would providebetter surveillance of the market. Strengthening the position of the ClearingCorporation of India Ltd. (CCIL) as the only centralised counterparty for Indian OTCderivatives market and better supervision of the off-balance sheet business offinancial institutions are two measures that have been proposed to ensure the stabilityof the market.Derivatives and Over the Counter Market, Financial Institutions and Services and Government Policy and Financial Regulation

Comparing the impact of management on public and private nurses in Bangladesh

Purpose The purpose of this paper is to use conservation of resources (COR) theory as a lens for comparing the impact of line management on Bangladeshi public and private nurses’ perception of work harassment, well-being and turnover intentions where Anglo-American and European management models have been super-imposed on an existing different culture. Design/methodology/approach Survey data were collected from 317 Bangladeshi nurses’ (131 from the public sector and 186 from the private sector). Structural equation modelling was used for analysis. Findings High work harassment was associated with low-being, and together with management practices, it explained approximately a quarter of private sector nurses’ well-being. In total, management, work harassment and employee well-being explained approximately a third of the turnover intentions of public sector nurses, whereas only work harassment explained approximately a third of private sector nurses’ turnover intentions. The findings suggest a differential impact of management on work harassment across the public and private sector. Research limitations/implications Cross-sectional data are susceptible to common method bias. A common latent factor was included, and several items that were explained by common method variance were controlled. Further, the findings are limited by the sample size from one sector and the use of only one developing country. Practical implications It is a waste of resources to transplant Anglo-American and European management models to developing countries without understanding the impact on nurses’ outcomes. Originality/value Anglo-American and European management models are not easily transferable to the Bangladesh context probably because of the impact of ties and corruption. Line management is a positive resource that builds employee well-being for public sector employees only