Fin News Letter Essay

902 Words Oct 26th, 2011 4 Pages
Finomina News Letter
Indian Institute Of Management Udaipur

Aman/Sravan 10/28/2011

Ratio Information

Capital Adequacy Ratio - CAR
It is a measure of a bank's capital. It is expressed as a percentage of a bank's risk weighted credit exposures.

Also known as "Capital to Risk Weighted Assets Ratio (CRAR)." Capital Adequacy Ratio – CAR This ratio is used to protect depositors and promote the stability and efficiency of financial systems around the world. Two types of capital are measured: tier one capital, which can absorb losses without a bank being required to cease trading, and tier two capital, which can absorb losses in the event of a winding-up and so provides a lesser degree of protection to depositors.

SLR- Statutory
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An increase in Reverse repo rate can cause the banks to transfer more funds to RBI due to this attractive interest rates. It can cause the money to be drawn out of the banking system. The current Reverse repo rate in Indian is 7.5%

Article of the Day
As reported by Krugman, the falling economies of US, Greece etc. have resorted to austerity measures( decrease in Govt spending on salaries and creation of jobs). Is this correct? The situation demands the government to spend more and create jobs but they have resorted to other way. A few months ago various pundits began hailing the achievements of Latvia, which in the aftermath of a terrible recession nonetheless managed to reduce its budget deficit and convince markets that it was fiscally sound. That was, indeed, impressive, but it came at the cost of 16 percent unemployment and an economy that, while finally growing, is still 18 percent smaller than it was before the crisis. The Euro zone finally reached an agreement on increasing the leverage of specifically created EFSF (Europe Financial Stability Fund) to more than 1 trillion euros from the earlier limit of 440 billion euros. The decision has been taken in positive light by markets across the world. The indian markets sensex surged by 516 points to 17804 and Nifty by 159 to 5360. The gold rates are also expected to see its biggest gain of the week in the aftermath of this event. Two proposals have been doing the round in order to

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