Macroeconomic Stress Testing and the Resilience of the Indian Banking System: A Focus on Credit Risk

The paper undertakes a macroprudential analysis of the credit risk of Public Sector Banks during the liberalization period. Using the Vector Autoregression methodology, the paper investigates the dynamic impact of changes in the macroeconomic variables on the default rate, the Financial Stability Indicator of banks by simulating interactions among all the variables included in the model. Feedback effects from the banking sector to the real economy are also estimated. The impact of variations in different Monetary Policy Instruments such as Bank Rate, Repo Rate and Reverse Repo Rate on the asset quality of banks is examined using three alternative baseline models. Impulse Response Functions of the estimated models are augmented by conducting sensitivity and scenario stress testing exercises to assess the banking sector’s vulnerability to credit risk in the face of hypothetically generated adverse macroeconomic shocks. Results indicate the absence of cyclicality and pro-cyclicality of the default rate. Adverse shocks to output gap, Real Effective Exchange Rate appreciation above its trend value, inflation rate and policy-induced monetary tightening significantly affect bank asset quality. Of the three policy rates, Bank Rate affects bank soundness with a lag and is more persistent while the two short-term rates impact default rate instantaneously but is much less persistent. Scenario stress tests reveal default rate of Public Sector Banks could increase on an average from 4% to 7% depending on the type of hypothetical macroeconomic scenario generated. An average buffer capital of 3% accumulated during the period under consideration could thus be inadequate for nearly twice the amount of Non-Performing Assets generated if macroeconomic conditions worsened. An important policy implication of the paper is that as the Indian economy moves gradually to Full Capital Account Convertibility, the banking sector is likely to come under increased stress in view of the exchange rate volatility with adverse repercussions on interest rates and bank default rates. In this emerging scenario, monetary policy stance thus emerges as an important precondition for banking stability. The study also highlights the inadequacy of existing capital reserves should macroeconomic conditions deteriorate and the urgency to strengthen the buffer capital position.Banks, Macro Prudential analysis, Stress test

Macroeconomic Stress Testing and the Resilience of the Indian Banking System: A Focus on Credit Risk

The paper undertakes a macroprudential analysis of the credit risk of Public Sector Banks during the liberalization period. Using the Vector Autoregression methodology, the paper investigates the dynamic impact of changes in the macroeconomic variables on the default rate, the Financial Stability Indicator of banks by simulating interactions among all the variables included in the model. Feedback effects from the banking sector to the real economy are also estimated. The impact of variations in different Monetary Policy Instruments such as Bank Rate, Repo Rate and Reverse Repo Rate on the asset quality of banks is examined using three alternative baseline models. Impulse Response Functions of the estimated models are augmented by conducting sensitivity and scenario stress testing exercises to assess the banking sector’s vulnerability to credit risk in the face of hypothetically generated adverse macroeconomic shocks. Results indicate the absence of cyclicality and pro-cyclicality of the default rate. Adverse shocks to output gap, Real Effective Exchange Rate appreciation above its trend value, inflation rate and policy-induced monetary tightening significantly affect bank asset quality. Of the three policy rates, Bank Rate affects bank soundness with a lag and is more persistent while the two short-term rates impact default rate instantaneously but is much less persistent. Scenario stress tests reveal default rate of Public Sector Banks could increase on an average from 4% to 7% depending on the type of hypothetical macroeconomic scenario generated. An average buffer capital of 3% accumulated during the period under consideration could thus be inadequate for nearly twice the amount of Non-Performing Assets generated if macroeconomic conditions worsened. An important policy implication of the paper is that as the Indian economy moves gradually to Full Capital Account Convertibility, the banking sector is likely to come under increased stress in view of the exchange rate volatility with adverse repercussions on interest rates and bank default rates. In this emerging scenario, monetary policy stance thus emerges as an important precondition for banking stability. The study also highlights the inadequacy of existing capital reserves should macroeconomic conditions deteriorate and the urgency to strengthen the buffer capital position

Macroeconomic Stress Testing and the Resilience of the Indian Banking System: A Focus on Credit Risk

The paper undertakes a macroprudential analysis of the credit risk of Public Sector Banks during the liberalization period. Using the Vector Autoregression methodology, the paper investigates the dynamic impact of changes in the macroeconomic variables on the default rate, the Financial Stability Indicator of banks by simulating interactions among all the variables included in the model. Feedback effects from the banking sector to the real economy are also estimated. The impact of variations in different Monetary Policy Instruments such as Bank Rate, Repo Rate and Reverse Repo Rate on the asset quality of banks is examined using three alternative baseline models. Impulse Response Functions of the estimated models are augmented by conducting sensitivity and scenario stress testing exercises to assess the banking sector’s vulnerability to credit risk in the face of hypothetically generated adverse macroeconomic shocks. Results indicate the absence of cyclicality and pro-cyclicality of the default rate. Adverse shocks to output gap, Real Effective Exchange Rate appreciation above its trend value, inflation rate and policy-induced monetary tightening significantly affect bank asset quality. Of the three policy rates, Bank Rate affects bank soundness with a lag and is more persistent while the two short-term rates impact default rate instantaneously but is much less persistent. Scenario stress tests reveal default rate of Public Sector Banks could increase on an average from 4% to 7% depending on the type of hypothetical macroeconomic scenario generated. An average buffer capital of 3% accumulated during the period under consideration could thus be inadequate for nearly twice the amount of Non-Performing Assets generated if macroeconomic conditions worsened. An important policy implication of the paper is that as the Indian economy moves gradually to Full Capital Account Convertibility, the banking sector is likely to come under increased stress in view of the exchange rate volatility with adverse repercussions on interest rates and bank default rates. In this emerging scenario, monetary policy stance thus emerges as an important precondition for banking stability. The study also highlights the inadequacy of existing capital reserves should macroeconomic conditions deteriorate and the urgency to strengthen the buffer capital position

Optic neuritis presented as the only manifestation of neurosyphilis

Here, we report a case of syphilis presented with optic neuritis to consider neurosyphilis as one of the differential diagnoses of optic neuritis. A 25-year-old male attended at outpatient department of chittagong eye infirmary and training complex institute with a history of a sudden loss of vision in the left eye for 20 days. On eye examination, the patient had reduced visual acuity on the left eye (6/60), and the left pupil showed a relative afferent pupillary defect and swollen left optic disc. No other abnormalities were found in a routine blood test and magnetic resonance imaging of the brain. Intravenous corticosteroid was administered for 3 days followed by oral corticosteroid. His vision was gradually improving within a month and became 6/9 in the left eye, but after a month, the patient returned with the blurring of vision in the same eye for 3 days. An extensive serum biochemical and serological test and cerebrospinal fluid (CSF) analysis was done including syphilis serology and human immunodeficiency virus (HIV) serology. Venereal disease research laboratory (VDRL) test and Treponema pallidum hemagglutination assay (TPHA) were found positive with high titer (1:1280) and rapid plasma reagin (RPR) titer of 1:64 in blood. The CSF analysis showed leukocytosis, and VDRL and TPHA were also found positive with high RPR titer. The HIV serology test was negative. The patient was treated with injectable ceftriaxone 2 g intravenously for 14 days and also injectable corticosteroid. His vision was improved within this period. Unilateral optic neuritis due to syphilis without other ocular features is uncommon but should be considered if a patient presents with visual loss and optic disc swelling. Early diagnosis based on clinical suspicion and prompt management is important to prevent visual impairment and subsequent neurological complications

Mutational landscape of cytokine genes across major tumour types identifies new targets

Introduction: Components of immune system communicate extensively in tumour micro environment. Normally, immune system engages with tumours to inhibit its further progression. Simultaneously, cancer cells learn cues derived from immune system to its own growth advantage. Cytokines are cell signaling messengers that affect disease pathogenesis, non-specific response to infection, specific response to antigen, etc. A battery of cytokines are produced in the tumour microenvironment, when released in response to infections and inflammations, can function to inhibit tumour development and progression. Cancer cells also release cytokines that promote growth, extenuate apoptosis and perform invasion and metastasis. Hypothesis: Alterations in cytokine signaling genes might help tumour to misguide immune system. The aim of the study is to identify such genomic alterations in cytokine genes that may drive major human cancers. Methods: We did extensive literature survey to prepare a list of known cytokine genes (n=776) which were validated in multiple databases. To know the baseline DNA variation in cytokine genes, we analyzed DNA variations in healthy human population from the 1000 Genome project dataset. Somatic mutational landscape for cytokine genes were analyzed in 32 different human cancer types (TCGA data). Significantly mutated genes were detected using MutSig2CV and Oncodrive FM analysis. Genes found significant in both analysis were  tabulated. Standard statistical  and bioinformatic analysis were done further to identify putative driver events. Result: We detected 9 significantly mutated cytokine genes across major tumor types. EDN1 was found to be most significantly mutated, in multiple tumour types; apart from genes like CDH1, B2M, HLA-B, IL4, TRIM22, TGFB1, GDF1 and CRABP2. Discussion: Our systematic survey of somatic mutations in cytokine genes, in major tumour types, identified novel genes targets such as EDN1 gene. EDN1 is a chemokine, also a potent vasoconstrictor. EDN1 signaling modifies tumour microenvironment by regulating contribution of cells around tumor stroma through both autocrine and paracrine mechanisms, by promoting tumour cell proliferation, neovascularization, etc. Other significantly mutated genes are associated with antigen presentation, cell proliferation and chemoattraction. Rational combination therapy with current inhibitors to disrupt these signaling networks in tumor microenvironment, may improve clinical outcomes in patients

Surface engineered nanodiamonds: mechanistic intervention in biomedical applications for diagnosis and treatment of cancer

In terms of biomedical tools, nanodiamond (ND) is a more recent innovation. Their size ranged from 4 to 100 nm. ND is produced via a variety of methods and is known for its physical toughness, durability, and chemical stability. The study revealed that surface modifications and functionalization have a significant influence on the optical and electrical properties of the nanomaterial. ND's surface functional groups have applications in a variety of domains, including drug administration, gene delivery, immunotherapy for cancer treatment, and bio-imaging to diagnose cancer. The biocompatibility of a material is critical for in vivo and in vitro interventions. This review focuses on recent advances in the methods of ND synthesis and ND-assisted drug delivery, moving through studies in cellular and animal models and bio-imaging for other biomedical applications. Furthermore, the prognosis of its clinical translation is being studied. </p

Molecular Dynamics Simulation and Pharmacoinformatic Integrated Analysis of Bioactive Phytochemicals from Azadirachta indica (Neem) to Treat Diabetes Mellitus

Diabetes mellitus is a chronic hormonal and metabolic disorder in which our body cannot generate necessary insulin or does not act in response to it, accordingly, ensuing in discordantly high blood sugar (glucose) levels. Diabetes mellitus can lead to systemic dysfunction in the multiorgan system, including cardiac dysfunction, severe kidney disease, lowered quality of life, and increased mortality risk from diabetic complications. To uncover possible therapeutic targets to treat diabetes mellitus, the in silico drug design technique is widely used, which connects the ligand molecules with target proteins to construct a protein-ligand network. To identify new therapeutic targets for type 2 diabetes mellitus, Azadirachta indica is subjected to phytochemical screening using in silico molecular docking, pharmacokinetic behavior analysis, and simulation-based molecular dynamic analysis. This study has analyzed around 63 phytochemical compounds, and the initial selection of the compounds was made by analyzing their pharmacokinetic properties by comparing them with Lipinski’s rule of 5. The selected compounds were subjected to molecular docking. The top four ligand compounds were reported along with the control drug nateglinide based on their highest negative molecular binding affinity. The protein-ligand interaction of selected compounds has been analyzed to understand better how compounds interact with the targeted protein structure. The results of the in silico analysis revealed that 7-Deacetyl-7-oxogedunin had the highest negative docking score of −8.9 Kcal/mol and also demonstrated standard stability in a 100 ns molecular dynamic simulation performed with insulin receptor ectodomain. It has been found that these substances may rank among the essential supplementary antidiabetic drugs for treating type 2 diabetes mellitus. It is suggested that more in vivo and in vitro research studies be carried out to support the conclusions drawn from this in silico research strategy

Surface engineered nanodiamonds: mechanistic intervention in biomedical applications for diagnosis and treatment of cancer

In terms of biomedical tools, nanodiamond (ND) is a more recent innovation. Their size ranged from 4 to 100 nm. ND is produced via a variety of methods and is known for its physical toughness, durability, and chemical stability. The study revealed that surface modifications and functionalization have a significant influence on the optical and electrical properties of the nanomaterial. ND's surface functional groups have applications in a variety of domains, including drug administration, gene delivery, immunotherapy for cancer treatment, and bio-imaging to diagnose cancer. The biocompatibility of a material is critical for in vivo and in vitro interventions. This review focuses on recent advances in the methods of ND synthesis and ND-assisted drug delivery, moving through studies in cellular and animal models and bio-imaging for other biomedical applications. Furthermore, the prognosis of its clinical translation is being studied. </p

A novel triazine-aryl-bis-indole derivative inhibits both phosphodiesterase IV and expression of cell adhesion molecules

Asthma, like many inflammation related disorders, has a complex etiology. Drugs targeting multiple pathways may prove more efficacious in these complex disorders. Cyclic 3′,5′-adenosine monophosphate (cAMP) phosphodiesterase IV (PDE IV) is one of the validated targets in bronchial asthma and despite availability of some therapeutic molecules targeting PDE IV, molecules with better properties are desired. Eosinophil/neutrophil infiltration into lung may also be an important component of bronchial asthma in which increased expression of epithelial cell adhesion molecules may play an important role. This study describes the synthesis of a novel class of compounds ‘triazine-aryl-bis-indoles’ having a catechol derived structure constituting a part of ‘triazine’ and a part of ‘bis-indole’ moiety on it. This class of molecules potently inhibited both phosphodiesterase IV and expression of cell adhesion molecules ICAM-1 and VCAM-1. The best molecule of this class (compound 11) inhibited PDE IV activity in vitro, with an IC50 value of 14 μM compared to 12.7 μM for an existing drug rolipram. The compound 11 not only stabilized the cAMP level in human lung epithelial cells (L132) following stimulation with forskolin, but also inhibited TNF-α induced expression of cell adhesion molecules such as ICAM-1 and VCAM-1 in human umbilical vein epithelial cells (HUVECs). It also significantly inhibited the adhesion of human neutrophils to the endothelial monolayer (IC50 = 17.86 μM) in a dose dependent manner. Its absolute bioavailability (in mice) was found to be 70% and its toxicity and pharmacokinetic profiles are excellent. The dual activity of this class of molecules suggests that this class of molecules could have broad therapeutic applications in neutrophil dominant diseases such as severe asthma, COPD and acute lung injury