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Notice (8): Undefined variable: file [APP/View/Elements/side_bar.ctp, line 60]Code Context// $file = 'http://aabhiyan:QUVLg8Wzs2F7G9N7@nepalstock.com.np/api/indexdata.xml';if(!$xml = simplexml_load_file($file)){$viewFile = '/var/www/html/newbusinessage.com/app/View/Elements/side_bar.ctp' $dataForView = array( 'articles' => array( (int) 0 => array( 'Article' => array( [maximum depth reached] ) ), (int) 1 => array( 'Article' => array( [maximum depth reached] ) ) ), 'current_user' => null, 'logged_in' => false ) $articles = array( (int) 0 => array( 'Article' => array( 'id' => '103', 'article_category_id' => '37', 'title' => 'Lessons From The Global Crisis', 'sub_title' => '', 'summary' => null, 'content' => '<div style="width: 595px;"> <div justify="" style="width: 595px;"> <div> <div align="center" style="border: 1px solid rgb(204, 204, 204); padding: 5px;"> <div align="left"> <span style="font-size:12px;">The key lessons from the recent global financial crisis could be divided under three heads:<br /> <br /> Economic lessons<br /> <br /> Financial lessons<br /> <br /> Policy lessons<br /> </span></div> </div> </div> </div> <p> <span style="font-size:12px;"><br /> </span></p> <div style="width: 595px;"> <div justify="" style="width: 595px;"> <div> <div align="center" style="border: 1px solid rgb(204, 204, 204); padding: 5px;"> <div align="left"> <span style="font-size:12px;">Overall, we need to learn that the key economic lesson of this crisis is to avoid too much debt.</span></div> </div> </div> </div> <span style="font-size:12px;"><br /> </span> <div style="width: 595px;"> <div justify="" style="width: 595px;"> <div> <div align="center" style="border: 1px solid rgb(204, 204, 204); padding: 5px;"> <div align="left"> <span style="font-size:12px;">The banks that came out of the crisis unscathed were well capitalized, had ample liquidity and had strategies that were customer focused. In many respects, they could be termed conservatively run.</span></div> </div> </div> </div> <span style="font-size:12px;"><br /> </span> <div style="width: 595px;"> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: left;"> <div align="justify"> <span style="font-size:12px;"><strong>ECONOMIC LESSONS </strong><br /> In order to derive a proper understanding, it is important to look at this crisis in context. It is evident that a shift in the balance of power is underway i.e. from the West to the East. Though it will take time, the beneficiaries in this shift are countries with good financial resources, natural resources or the ability to adapt/ change. Thus the winners will have cash, commodities or creativity. The West, having seen an era of excess now encounters an era of austerity. In contrast, emerging economies have enjoyed an era of boom and are now in need of investment. These macro-trends will have a significant bearing on the postcrisis debate. In the UK, for instance, the debate over the banking and financial sector still has some way to go. A few years ago there was at least a general agreement that the financial sector was good for the economy. Now there are questions if the banking/ financial sector is good or bad. The danger in that debate is that commercial banks that facilitate much business and trade will be squeezed. In the US, Paul Volcker has not only produced his own plan for the financial sector but last year he also said the only socially useful innovation from banks had been the ATM machine. This links into the wider debate over innovation vs. regulation and getting the balance right. For Asia, the debate is different. Relative to the challenges in the banking sector in the west, this is an opportunity. But, relative to the macro-economic environment and outlook in Asia, there are challenges. For instance, the cost of future public sector investment is huge, estimated at over eight trillion dollars. Then there is the issue of capital flows and how to manage this, which links into the</span></div> </div> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: right;"> <div align="justify"> <span style="font-size:12px;">need for Asia to deepen and broaden its capital markets. The outlook for the banking and financial sector cannot be viewed in isolation from the macro-economic climate. <br /> There is a genuine risk of a double-dip, slipping back into recession, although a weak recovery is more likely. A double dip could occur if there was a policy mistake, an external shock or a loss of confidence. But the world economy is experiencing a shift, with more of global growth driven by emerging economies. Whilst, it is important not to underestimate the downside risks from debt and deleveraging in the West, looking at levels gives a different perspective. A decade ago, the size of the world economy was $ 31 trillion. On the eve of the crisis, it had risen to $ 61 trillion collapsing during the crisis to $ 58 trillion. Now it is back to pre-crisis levels. Global trade peaked in 2008, collapsing 21 per cent by May 2009. Since then trade has almost recovered to pre-recession levels reaching 98 per cent of that level by June 2010. The world economy is not decoupled. The collapsing trade had highlighted the inter-connectedness of the world economy. Although it was a crisis made in the West, it has had global implications. But the key lesson from this crisis is debt, too much debt. Although there were many characteristics of this crisis that were different from the previous ones, the fundamental cause was the same: too much debt. In fact, there are a number of factors linked to this. The crisis witnessed a lethal combination of debt, leverage and gearing combined with easy money and with one way.<br /> <br /> <br /> </span></div> </div> <div style="clear: both;"> <span style="font-size:12px;"><br /> </span></div> </div> </div> </div> </div> <div style="width: 595px;"> <span style="font-size:12px;"><br /> </span> <div style="width: 595px;"> <div style="width: 595px;"> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: left;"> <div align="justify"> <span style="font-size:12px;"><strong>FINANCIAL LESSONS <br /> </strong><br /> The main financial lesson of the crisis is liquidity. The crisis was triggered by a combination of factors: an imbalanced global economy, a failure to heed to warning signs and a systemic failure of the financial system. A strong rebound seen in banks over the last year has occurred in an environment where the global policy stimulus has been huge. Now, a more difficult time lies ahead as it becomes clear that the recovery in the West is weak, adding to the pressure on banks to lend. To heed the lessons for the financial sector, it is important to learn lessons from those that failed and also recognize that not all broke, even in the city of London, and there are lessons to learn from where things worked well. The banks that came out of the crisis unscathed were well capitalized, had ample liquidity and had strategies that were customer focused. In many respects, they could be termed “conservatively runâ€. There were also lessons to learn from countries that had a good crisis e.g. Australia and Canada benefitted from effective supervision. There are also important lessons to learn from Asia, including China, particularly in the case of macroprudential measures. <br /> <br /> These are specific and targeted measures that</span></div> </div> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: right;"> <div align="justify"> <span style="font-size:12px;">worked well. They included reserve requirements for banks and specific measures that could, for instance, be aimed at real estate such as Loan to Value ratios. The potential effectiveness of macroprudential measures needs to be fully appreciated. They can be effective especially if used alongside appropriate monetary policies. There are also important lessons to learn from those institutions that failed. It came out loud and clear that there was a failure of corporate governance. In particular, senior managements and Boards did not guard against excessive risk-taking. This was particularly relevant with respect to liquidity. Some banks thought they didn't need much liquidity possibly because they thought risks were low or that Central Bank could help. The scale of the unregulated financial sector was also a distinctive result as the crisis unfolded. Hence, the needs for regulators to widen the scope of their regulatory remit. There was a lack of risk management, lack of liquidity management and procyclical behavior that added fuel to the fire. Capital reserves were built on artificially low default risks. And, when the crisis broke, mark to market triggered both asset write-downs and panic selling. So there are many financial lessons from the crisis but the key is liquidity.</span></div> </div> <div style="clear: both;"> <span style="font-size:12px;"><br /> <br /> </span></div> </div> </div> </div> <div style="width: 595px;"> <div style="width: 595px;"> <div style="width: 595px;"> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: left;"> <div align="justify"> <span style="font-size:12px;"><strong>POLICY LESSONS <br /> <br /> </strong>The first lesson is, avoid cheap money. This encourages the buildup of debt especially where debt is subsidized by favorable tax treatment as was the case in the US. Avoiding cheap money doesn't mean that there will not be occasions when interest rates should be low as in the West now. <br /> <br /> <br /> The second lesson: learn the lessons from Asia and make effective use of macro-prudential measures. The third lesson is applicable to China and much of Asia now. With interest rates low in the west and likely to stay that way for some time, money is likely to flow east. This is likely to feed the asset-price inflation, perhaps on some government bond markets, and also in equities and real estate. Asia needs to heed such warning signs and not only take on board avoiding cheap money but also do more in terms of accepting greater currency flexibility and moving towards deepening and broadening its capital markets.<br /> <br /> <br /> State capitalization and the role of the state are likely to be a future dominant issue. The crisis also<br /> <br /> <br /> </span></div> </div> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: right;"> <div align="justify"> <span style="font-size:12px;"> saw a desire by some financial firms to secure anchor shareholders. There is a need for long term players. Perhaps the most important policy issue is the need for an international approach to regulatory issues. The trade-off between an international approach and domestic agenda is an important one. One can understand on domestic economic grounds why now there are differences in macro policy. While deflation is a risk in the West, the East is characterized by inflation. Yet on financial issues, given the contagion that was witnessed during the crisis, an international approach is the key. Thus we have seen the move to G20 and the Financial Stability Board (FSB) and this was reflected in the Basel III announcement.<br /> <br /> <br /> In conclusion, the three key words are- debt, and the need to minimize it; liquidity, and the need for financial institutions to have sufficient amount; and the importance of policy makers to send the right incentives. (The writer is Chief Executive Officer, Standard Chartered Bank Nepal Ltd.)<br /> <br /> </span></div> </div> <div style="clear: both;"> <span style="font-size:12px;"><br /> </span></div> </div> </div> </div>', 'published' => true, 'created' => '2010-12-24', 'modified' => '2012-09-20', 'keywords' => '', 'description' => 'In order to derive a proper understanding, it is important to look at this crisis in context. It is evident that a shift in the balance of power is underway i.e. from the West to the East.', 'sortorder' => '51', 'image' => null, 'article_date' => '0000-00-00 00:00:00', 'homepage' => false, 'breaking_news' => false, 'main_news' => false, 'in_scroller' => false, 'user_id' => '0' ) ), (int) 1 => array( 'Article' => array( 'id' => '102', 'article_category_id' => '37', 'title' => 'Four Months Wait For BUDGET Is Over', 'sub_title' => '', 'summary' => null, 'content' => '<div style="width: 595px;"> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: left;"> <div align="justify"> <span style="width: 100%;">Nepal's caretaker government has finally managed to bring out the annual budget by issuing an Ordinance after a delay of four months from the date the fiscal year strated. Giving continuity to most of the ongoing programs, Finance Minister Surendra Pandey, announced the budget of Rs 337.9 billion for the fiscal year 2010/11. It is an increment of 18 per cent compared to last year's budget of Rs 285.9 billion. <br /> <br /> The government has allocated 56.3 per cent of the total budget for recurrent expenditure, 38.3 per cent for capital expenditure and 5.4 per cent for principal repayment. The estimated spending is 30.4 per cent more than the revised estimate of expenditure of the previous year. In terms of the structure of the expenditure, recurrent expenditure has increased by 25.8 per cent and capital expenditure by 44.8 per cent.<br /> <br /> To meet the expenditures, the government aims to mobilize Rs 216.64 billion from revenue and Rs 65.35 billion from foreign grants. Deficit of Rs 55.91 billion is expected to be covered from foreign loans of Rs 22.23 billion and domestic borrowings of Rs. 33.68 billion. The amount of proposed foreign loans is 2.6 per cent of the estimated GDP.<br /> <br /> A review of the first quarter's revenue collection of the current fiscal year makes it challenging to meet the revenue target of the budget. It, therefore, seems an uphill task to meet the target of 4.5 per cent economic growth. Last year's budget had targeted 5.5 per cent economic growth but the actual achievement was 3.5 per cent. The new budget expects inflation to be around 8 per cent. It is higher than this year's monetary policy's target of 7.5 per cent. <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> </span></div> </div> <div align="justify" style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: right;"> <strong>Major Highlights of the Budget</strong><br /> <br /> <div style="padding: 0pt 0pt 0pt 5px;"> 01. More allocations for the infrastructure projects <br /> like Kathmandu-Terai fast track road, Mid-hills <br /> highway, Sikta and Ranijamara irrigation, <br /> Syafrubesi-Rasuwagadi road track, Upper <br /> Tamakoshi hydropower, etc.<br /> <br /> <br /> 02. Rs 500 thousand cash for the organizers of <br /> seminar or workshop involving more than 100 <br /> foreign passport holders entering Nepal <br /> through air-route once at a time<br /> <br /> <br /> 03. Provision of sub health post and police post <br /> for the productive industry that offers <br /> employment to more than 500 Nepali workers.<br /> <br /> <br /> 04. Black-topped roads reaching the premises of <br /> manufacturing companies employing more <br /> than 100 Nepali people.<br /> <br /> <br /> 05. Lands to be classified into six categories: <br /> agricultural, industrial, forestry, commercial, <br /> residential and public community. Ownership <br /> certificates to be issued accordingly.<br /> <br /> <br /> 06. Construction of large and medium sized <br /> reservoirs based hydropower projects at least <br /> one in every Development Region.<br /> <br /> <br /> 07. Two per cent incentive on equivalent Nepali <br /> currency to exporters on submission of bank <br /> documents showing that they have received <br /> convertible currencies earned from the <br /> exports. Incentive will be three percent and <br /> higher if the value addition of exported <br /> commodities exceeds 50 per cent or higher. <br /> They will also get 25 per cent income tax <br /> exemption.<br /> <br /> <br /> 08. Door opens for Non-resident Nepalis to invest <br /> in the capital market.<br /> <br /> <br /> 09. E-tendering made mandatory from 14 April <br /> 2011 onwards for all the contracts and tenders <br /> of more than Rs 20 million.<br /> <br /> <br /> 10. Merger of banks, finances and insurance <br /> companies encouraged. Changes in the <br /> provision of taxing assets and liabilities as <br /> deposal after merger will be introduced to <br /> make it non-taxable, and special <br /> arrangements have been made for share <br /> holders, managers and employees.</div> </div> <div style="clear: both;"> </div> </div> <div style="width: 595px;"> <img alt="" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/table-of-i-nc(1).jpg" /></div>', 'published' => true, 'created' => '2010-12-24', 'modified' => '2012-09-20', 'keywords' => '', 'description' => 'Nepal’s caretaker government has finally managed to bring out the annual budget by issuing an Ordinance after a delay of four months from the date the fiscal year started.', 'sortorder' => '50', 'image' => null, 'article_date' => '0000-00-00 00:00:00', 'homepage' => false, 'breaking_news' => false, 'main_news' => false, 'in_scroller' => false, 'user_id' => '0' ) ) ) $current_user = null $logged_in = falseinclude - APP/View/Elements/side_bar.ctp, line 60 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::_renderElement() - CORE/Cake/View/View.php, line 1224 View::element() - CORE/Cake/View/View.php, line 418 include - APP/View/Articles/index.ctp, line 157 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 968 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 117
Warning (2): simplexml_load_file() [<a href='http://php.net/function.simplexml-load-file'>function.simplexml-load-file</a>]: I/O warning : failed to load external entity "" [APP/View/Elements/side_bar.ctp, line 60]file not found!Code Context// $file = 'http://aabhiyan:QUVLg8Wzs2F7G9N7@nepalstock.com.np/api/indexdata.xml';if(!$xml = simplexml_load_file($file)){$viewFile = '/var/www/html/newbusinessage.com/app/View/Elements/side_bar.ctp' $dataForView = array( 'articles' => array( (int) 0 => array( 'Article' => array( [maximum depth reached] ) ), (int) 1 => array( 'Article' => array( [maximum depth reached] ) ) ), 'current_user' => null, 'logged_in' => false ) $articles = array( (int) 0 => array( 'Article' => array( 'id' => '103', 'article_category_id' => '37', 'title' => 'Lessons From The Global Crisis', 'sub_title' => '', 'summary' => null, 'content' => '<div style="width: 595px;"> <div justify="" style="width: 595px;"> <div> <div align="center" style="border: 1px solid rgb(204, 204, 204); padding: 5px;"> <div align="left"> <span style="font-size:12px;">The key lessons from the recent global financial crisis could be divided under three heads:<br /> <br /> Economic lessons<br /> <br /> Financial lessons<br /> <br /> Policy lessons<br /> </span></div> </div> </div> </div> <p> <span style="font-size:12px;"><br /> </span></p> <div style="width: 595px;"> <div justify="" style="width: 595px;"> <div> <div align="center" style="border: 1px solid rgb(204, 204, 204); padding: 5px;"> <div align="left"> <span style="font-size:12px;">Overall, we need to learn that the key economic lesson of this crisis is to avoid too much debt.</span></div> </div> </div> </div> <span style="font-size:12px;"><br /> </span> <div style="width: 595px;"> <div justify="" style="width: 595px;"> <div> <div align="center" style="border: 1px solid rgb(204, 204, 204); padding: 5px;"> <div align="left"> <span style="font-size:12px;">The banks that came out of the crisis unscathed were well capitalized, had ample liquidity and had strategies that were customer focused. In many respects, they could be termed conservatively run.</span></div> </div> </div> </div> <span style="font-size:12px;"><br /> </span> <div style="width: 595px;"> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: left;"> <div align="justify"> <span style="font-size:12px;"><strong>ECONOMIC LESSONS </strong><br /> In order to derive a proper understanding, it is important to look at this crisis in context. It is evident that a shift in the balance of power is underway i.e. from the West to the East. Though it will take time, the beneficiaries in this shift are countries with good financial resources, natural resources or the ability to adapt/ change. Thus the winners will have cash, commodities or creativity. The West, having seen an era of excess now encounters an era of austerity. In contrast, emerging economies have enjoyed an era of boom and are now in need of investment. These macro-trends will have a significant bearing on the postcrisis debate. In the UK, for instance, the debate over the banking and financial sector still has some way to go. A few years ago there was at least a general agreement that the financial sector was good for the economy. Now there are questions if the banking/ financial sector is good or bad. The danger in that debate is that commercial banks that facilitate much business and trade will be squeezed. In the US, Paul Volcker has not only produced his own plan for the financial sector but last year he also said the only socially useful innovation from banks had been the ATM machine. This links into the wider debate over innovation vs. regulation and getting the balance right. For Asia, the debate is different. Relative to the challenges in the banking sector in the west, this is an opportunity. But, relative to the macro-economic environment and outlook in Asia, there are challenges. For instance, the cost of future public sector investment is huge, estimated at over eight trillion dollars. Then there is the issue of capital flows and how to manage this, which links into the</span></div> </div> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: right;"> <div align="justify"> <span style="font-size:12px;">need for Asia to deepen and broaden its capital markets. The outlook for the banking and financial sector cannot be viewed in isolation from the macro-economic climate. <br /> There is a genuine risk of a double-dip, slipping back into recession, although a weak recovery is more likely. A double dip could occur if there was a policy mistake, an external shock or a loss of confidence. But the world economy is experiencing a shift, with more of global growth driven by emerging economies. Whilst, it is important not to underestimate the downside risks from debt and deleveraging in the West, looking at levels gives a different perspective. A decade ago, the size of the world economy was $ 31 trillion. On the eve of the crisis, it had risen to $ 61 trillion collapsing during the crisis to $ 58 trillion. Now it is back to pre-crisis levels. Global trade peaked in 2008, collapsing 21 per cent by May 2009. Since then trade has almost recovered to pre-recession levels reaching 98 per cent of that level by June 2010. The world economy is not decoupled. The collapsing trade had highlighted the inter-connectedness of the world economy. Although it was a crisis made in the West, it has had global implications. But the key lesson from this crisis is debt, too much debt. Although there were many characteristics of this crisis that were different from the previous ones, the fundamental cause was the same: too much debt. In fact, there are a number of factors linked to this. The crisis witnessed a lethal combination of debt, leverage and gearing combined with easy money and with one way.<br /> <br /> <br /> </span></div> </div> <div style="clear: both;"> <span style="font-size:12px;"><br /> </span></div> </div> </div> </div> </div> <div style="width: 595px;"> <span style="font-size:12px;"><br /> </span> <div style="width: 595px;"> <div style="width: 595px;"> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: left;"> <div align="justify"> <span style="font-size:12px;"><strong>FINANCIAL LESSONS <br /> </strong><br /> The main financial lesson of the crisis is liquidity. The crisis was triggered by a combination of factors: an imbalanced global economy, a failure to heed to warning signs and a systemic failure of the financial system. A strong rebound seen in banks over the last year has occurred in an environment where the global policy stimulus has been huge. Now, a more difficult time lies ahead as it becomes clear that the recovery in the West is weak, adding to the pressure on banks to lend. To heed the lessons for the financial sector, it is important to learn lessons from those that failed and also recognize that not all broke, even in the city of London, and there are lessons to learn from where things worked well. The banks that came out of the crisis unscathed were well capitalized, had ample liquidity and had strategies that were customer focused. In many respects, they could be termed “conservatively runâ€. There were also lessons to learn from countries that had a good crisis e.g. Australia and Canada benefitted from effective supervision. There are also important lessons to learn from Asia, including China, particularly in the case of macroprudential measures. <br /> <br /> These are specific and targeted measures that</span></div> </div> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: right;"> <div align="justify"> <span style="font-size:12px;">worked well. They included reserve requirements for banks and specific measures that could, for instance, be aimed at real estate such as Loan to Value ratios. The potential effectiveness of macroprudential measures needs to be fully appreciated. They can be effective especially if used alongside appropriate monetary policies. There are also important lessons to learn from those institutions that failed. It came out loud and clear that there was a failure of corporate governance. In particular, senior managements and Boards did not guard against excessive risk-taking. This was particularly relevant with respect to liquidity. Some banks thought they didn't need much liquidity possibly because they thought risks were low or that Central Bank could help. The scale of the unregulated financial sector was also a distinctive result as the crisis unfolded. Hence, the needs for regulators to widen the scope of their regulatory remit. There was a lack of risk management, lack of liquidity management and procyclical behavior that added fuel to the fire. Capital reserves were built on artificially low default risks. And, when the crisis broke, mark to market triggered both asset write-downs and panic selling. So there are many financial lessons from the crisis but the key is liquidity.</span></div> </div> <div style="clear: both;"> <span style="font-size:12px;"><br /> <br /> </span></div> </div> </div> </div> <div style="width: 595px;"> <div style="width: 595px;"> <div style="width: 595px;"> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: left;"> <div align="justify"> <span style="font-size:12px;"><strong>POLICY LESSONS <br /> <br /> </strong>The first lesson is, avoid cheap money. This encourages the buildup of debt especially where debt is subsidized by favorable tax treatment as was the case in the US. Avoiding cheap money doesn't mean that there will not be occasions when interest rates should be low as in the West now. <br /> <br /> <br /> The second lesson: learn the lessons from Asia and make effective use of macro-prudential measures. The third lesson is applicable to China and much of Asia now. With interest rates low in the west and likely to stay that way for some time, money is likely to flow east. This is likely to feed the asset-price inflation, perhaps on some government bond markets, and also in equities and real estate. Asia needs to heed such warning signs and not only take on board avoiding cheap money but also do more in terms of accepting greater currency flexibility and moving towards deepening and broadening its capital markets.<br /> <br /> <br /> State capitalization and the role of the state are likely to be a future dominant issue. The crisis also<br /> <br /> <br /> </span></div> </div> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: right;"> <div align="justify"> <span style="font-size:12px;"> saw a desire by some financial firms to secure anchor shareholders. There is a need for long term players. Perhaps the most important policy issue is the need for an international approach to regulatory issues. The trade-off between an international approach and domestic agenda is an important one. One can understand on domestic economic grounds why now there are differences in macro policy. While deflation is a risk in the West, the East is characterized by inflation. Yet on financial issues, given the contagion that was witnessed during the crisis, an international approach is the key. Thus we have seen the move to G20 and the Financial Stability Board (FSB) and this was reflected in the Basel III announcement.<br /> <br /> <br /> In conclusion, the three key words are- debt, and the need to minimize it; liquidity, and the need for financial institutions to have sufficient amount; and the importance of policy makers to send the right incentives. (The writer is Chief Executive Officer, Standard Chartered Bank Nepal Ltd.)<br /> <br /> </span></div> </div> <div style="clear: both;"> <span style="font-size:12px;"><br /> </span></div> </div> </div> </div>', 'published' => true, 'created' => '2010-12-24', 'modified' => '2012-09-20', 'keywords' => '', 'description' => 'In order to derive a proper understanding, it is important to look at this crisis in context. It is evident that a shift in the balance of power is underway i.e. from the West to the East.', 'sortorder' => '51', 'image' => null, 'article_date' => '0000-00-00 00:00:00', 'homepage' => false, 'breaking_news' => false, 'main_news' => false, 'in_scroller' => false, 'user_id' => '0' ) ), (int) 1 => array( 'Article' => array( 'id' => '102', 'article_category_id' => '37', 'title' => 'Four Months Wait For BUDGET Is Over', 'sub_title' => '', 'summary' => null, 'content' => '<div style="width: 595px;"> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: left;"> <div align="justify"> <span style="width: 100%;">Nepal's caretaker government has finally managed to bring out the annual budget by issuing an Ordinance after a delay of four months from the date the fiscal year strated. Giving continuity to most of the ongoing programs, Finance Minister Surendra Pandey, announced the budget of Rs 337.9 billion for the fiscal year 2010/11. It is an increment of 18 per cent compared to last year's budget of Rs 285.9 billion. <br /> <br /> The government has allocated 56.3 per cent of the total budget for recurrent expenditure, 38.3 per cent for capital expenditure and 5.4 per cent for principal repayment. The estimated spending is 30.4 per cent more than the revised estimate of expenditure of the previous year. In terms of the structure of the expenditure, recurrent expenditure has increased by 25.8 per cent and capital expenditure by 44.8 per cent.<br /> <br /> To meet the expenditures, the government aims to mobilize Rs 216.64 billion from revenue and Rs 65.35 billion from foreign grants. Deficit of Rs 55.91 billion is expected to be covered from foreign loans of Rs 22.23 billion and domestic borrowings of Rs. 33.68 billion. The amount of proposed foreign loans is 2.6 per cent of the estimated GDP.<br /> <br /> A review of the first quarter's revenue collection of the current fiscal year makes it challenging to meet the revenue target of the budget. It, therefore, seems an uphill task to meet the target of 4.5 per cent economic growth. Last year's budget had targeted 5.5 per cent economic growth but the actual achievement was 3.5 per cent. The new budget expects inflation to be around 8 per cent. It is higher than this year's monetary policy's target of 7.5 per cent. <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> </span></div> </div> <div align="justify" style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: right;"> <strong>Major Highlights of the Budget</strong><br /> <br /> <div style="padding: 0pt 0pt 0pt 5px;"> 01. More allocations for the infrastructure projects <br /> like Kathmandu-Terai fast track road, Mid-hills <br /> highway, Sikta and Ranijamara irrigation, <br /> Syafrubesi-Rasuwagadi road track, Upper <br /> Tamakoshi hydropower, etc.<br /> <br /> <br /> 02. Rs 500 thousand cash for the organizers of <br /> seminar or workshop involving more than 100 <br /> foreign passport holders entering Nepal <br /> through air-route once at a time<br /> <br /> <br /> 03. Provision of sub health post and police post <br /> for the productive industry that offers <br /> employment to more than 500 Nepali workers.<br /> <br /> <br /> 04. Black-topped roads reaching the premises of <br /> manufacturing companies employing more <br /> than 100 Nepali people.<br /> <br /> <br /> 05. Lands to be classified into six categories: <br /> agricultural, industrial, forestry, commercial, <br /> residential and public community. Ownership <br /> certificates to be issued accordingly.<br /> <br /> <br /> 06. Construction of large and medium sized <br /> reservoirs based hydropower projects at least <br /> one in every Development Region.<br /> <br /> <br /> 07. Two per cent incentive on equivalent Nepali <br /> currency to exporters on submission of bank <br /> documents showing that they have received <br /> convertible currencies earned from the <br /> exports. Incentive will be three percent and <br /> higher if the value addition of exported <br /> commodities exceeds 50 per cent or higher. <br /> They will also get 25 per cent income tax <br /> exemption.<br /> <br /> <br /> 08. Door opens for Non-resident Nepalis to invest <br /> in the capital market.<br /> <br /> <br /> 09. E-tendering made mandatory from 14 April <br /> 2011 onwards for all the contracts and tenders <br /> of more than Rs 20 million.<br /> <br /> <br /> 10. Merger of banks, finances and insurance <br /> companies encouraged. Changes in the <br /> provision of taxing assets and liabilities as <br /> deposal after merger will be introduced to <br /> make it non-taxable, and special <br /> arrangements have been made for share <br /> holders, managers and employees.</div> </div> <div style="clear: both;"> </div> </div> <div style="width: 595px;"> <img alt="" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/table-of-i-nc(1).jpg" /></div>', 'published' => true, 'created' => '2010-12-24', 'modified' => '2012-09-20', 'keywords' => '', 'description' => 'Nepal’s caretaker government has finally managed to bring out the annual budget by issuing an Ordinance after a delay of four months from the date the fiscal year started.', 'sortorder' => '50', 'image' => null, 'article_date' => '0000-00-00 00:00:00', 'homepage' => false, 'breaking_news' => false, 'main_news' => false, 'in_scroller' => false, 'user_id' => '0' ) ) ) $current_user = null $logged_in = falsesimplexml_load_file - [internal], line ?? include - APP/View/Elements/side_bar.ctp, line 60 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::_renderElement() - CORE/Cake/View/View.php, line 1224 View::element() - CORE/Cake/View/View.php, line 418 include - APP/View/Articles/index.ctp, line 157 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 968 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 117
Notice (8): Undefined variable: file [APP/View/Elements/side_bar.ctp, line 133]Code Context// $file = 'http://aabhiyan:QUVLg8Wzs2F7G9N7@nepalstock.com.np/api/subindexdata.xml';if(!$xml = simplexml_load_file($file)){$viewFile = '/var/www/html/newbusinessage.com/app/View/Elements/side_bar.ctp' $dataForView = array( 'articles' => array( (int) 0 => array( 'Article' => array( [maximum depth reached] ) ), (int) 1 => array( 'Article' => array( [maximum depth reached] ) ) ), 'current_user' => null, 'logged_in' => false ) $articles = array( (int) 0 => array( 'Article' => array( 'id' => '103', 'article_category_id' => '37', 'title' => 'Lessons From The Global Crisis', 'sub_title' => '', 'summary' => null, 'content' => '<div style="width: 595px;"> <div justify="" style="width: 595px;"> <div> <div align="center" style="border: 1px solid rgb(204, 204, 204); padding: 5px;"> <div align="left"> <span style="font-size:12px;">The key lessons from the recent global financial crisis could be divided under three heads:<br /> <br /> Economic lessons<br /> <br /> Financial lessons<br /> <br /> Policy lessons<br /> </span></div> </div> </div> </div> <p> <span style="font-size:12px;"><br /> </span></p> <div style="width: 595px;"> <div justify="" style="width: 595px;"> <div> <div align="center" style="border: 1px solid rgb(204, 204, 204); padding: 5px;"> <div align="left"> <span style="font-size:12px;">Overall, we need to learn that the key economic lesson of this crisis is to avoid too much debt.</span></div> </div> </div> </div> <span style="font-size:12px;"><br /> </span> <div style="width: 595px;"> <div justify="" style="width: 595px;"> <div> <div align="center" style="border: 1px solid rgb(204, 204, 204); padding: 5px;"> <div align="left"> <span style="font-size:12px;">The banks that came out of the crisis unscathed were well capitalized, had ample liquidity and had strategies that were customer focused. In many respects, they could be termed conservatively run.</span></div> </div> </div> </div> <span style="font-size:12px;"><br /> </span> <div style="width: 595px;"> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: left;"> <div align="justify"> <span style="font-size:12px;"><strong>ECONOMIC LESSONS </strong><br /> In order to derive a proper understanding, it is important to look at this crisis in context. It is evident that a shift in the balance of power is underway i.e. from the West to the East. Though it will take time, the beneficiaries in this shift are countries with good financial resources, natural resources or the ability to adapt/ change. Thus the winners will have cash, commodities or creativity. The West, having seen an era of excess now encounters an era of austerity. In contrast, emerging economies have enjoyed an era of boom and are now in need of investment. These macro-trends will have a significant bearing on the postcrisis debate. In the UK, for instance, the debate over the banking and financial sector still has some way to go. A few years ago there was at least a general agreement that the financial sector was good for the economy. Now there are questions if the banking/ financial sector is good or bad. The danger in that debate is that commercial banks that facilitate much business and trade will be squeezed. In the US, Paul Volcker has not only produced his own plan for the financial sector but last year he also said the only socially useful innovation from banks had been the ATM machine. This links into the wider debate over innovation vs. regulation and getting the balance right. For Asia, the debate is different. Relative to the challenges in the banking sector in the west, this is an opportunity. But, relative to the macro-economic environment and outlook in Asia, there are challenges. For instance, the cost of future public sector investment is huge, estimated at over eight trillion dollars. Then there is the issue of capital flows and how to manage this, which links into the</span></div> </div> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: right;"> <div align="justify"> <span style="font-size:12px;">need for Asia to deepen and broaden its capital markets. The outlook for the banking and financial sector cannot be viewed in isolation from the macro-economic climate. <br /> There is a genuine risk of a double-dip, slipping back into recession, although a weak recovery is more likely. A double dip could occur if there was a policy mistake, an external shock or a loss of confidence. But the world economy is experiencing a shift, with more of global growth driven by emerging economies. Whilst, it is important not to underestimate the downside risks from debt and deleveraging in the West, looking at levels gives a different perspective. A decade ago, the size of the world economy was $ 31 trillion. On the eve of the crisis, it had risen to $ 61 trillion collapsing during the crisis to $ 58 trillion. Now it is back to pre-crisis levels. Global trade peaked in 2008, collapsing 21 per cent by May 2009. Since then trade has almost recovered to pre-recession levels reaching 98 per cent of that level by June 2010. The world economy is not decoupled. The collapsing trade had highlighted the inter-connectedness of the world economy. Although it was a crisis made in the West, it has had global implications. But the key lesson from this crisis is debt, too much debt. Although there were many characteristics of this crisis that were different from the previous ones, the fundamental cause was the same: too much debt. In fact, there are a number of factors linked to this. The crisis witnessed a lethal combination of debt, leverage and gearing combined with easy money and with one way.<br /> <br /> <br /> </span></div> </div> <div style="clear: both;"> <span style="font-size:12px;"><br /> </span></div> </div> </div> </div> </div> <div style="width: 595px;"> <span style="font-size:12px;"><br /> </span> <div style="width: 595px;"> <div style="width: 595px;"> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: left;"> <div align="justify"> <span style="font-size:12px;"><strong>FINANCIAL LESSONS <br /> </strong><br /> The main financial lesson of the crisis is liquidity. The crisis was triggered by a combination of factors: an imbalanced global economy, a failure to heed to warning signs and a systemic failure of the financial system. A strong rebound seen in banks over the last year has occurred in an environment where the global policy stimulus has been huge. Now, a more difficult time lies ahead as it becomes clear that the recovery in the West is weak, adding to the pressure on banks to lend. To heed the lessons for the financial sector, it is important to learn lessons from those that failed and also recognize that not all broke, even in the city of London, and there are lessons to learn from where things worked well. The banks that came out of the crisis unscathed were well capitalized, had ample liquidity and had strategies that were customer focused. In many respects, they could be termed “conservatively runâ€. There were also lessons to learn from countries that had a good crisis e.g. Australia and Canada benefitted from effective supervision. There are also important lessons to learn from Asia, including China, particularly in the case of macroprudential measures. <br /> <br /> These are specific and targeted measures that</span></div> </div> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: right;"> <div align="justify"> <span style="font-size:12px;">worked well. They included reserve requirements for banks and specific measures that could, for instance, be aimed at real estate such as Loan to Value ratios. The potential effectiveness of macroprudential measures needs to be fully appreciated. They can be effective especially if used alongside appropriate monetary policies. There are also important lessons to learn from those institutions that failed. It came out loud and clear that there was a failure of corporate governance. In particular, senior managements and Boards did not guard against excessive risk-taking. This was particularly relevant with respect to liquidity. Some banks thought they didn't need much liquidity possibly because they thought risks were low or that Central Bank could help. The scale of the unregulated financial sector was also a distinctive result as the crisis unfolded. Hence, the needs for regulators to widen the scope of their regulatory remit. There was a lack of risk management, lack of liquidity management and procyclical behavior that added fuel to the fire. Capital reserves were built on artificially low default risks. And, when the crisis broke, mark to market triggered both asset write-downs and panic selling. So there are many financial lessons from the crisis but the key is liquidity.</span></div> </div> <div style="clear: both;"> <span style="font-size:12px;"><br /> <br /> </span></div> </div> </div> </div> <div style="width: 595px;"> <div style="width: 595px;"> <div style="width: 595px;"> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: left;"> <div align="justify"> <span style="font-size:12px;"><strong>POLICY LESSONS <br /> <br /> </strong>The first lesson is, avoid cheap money. This encourages the buildup of debt especially where debt is subsidized by favorable tax treatment as was the case in the US. Avoiding cheap money doesn't mean that there will not be occasions when interest rates should be low as in the West now. <br /> <br /> <br /> The second lesson: learn the lessons from Asia and make effective use of macro-prudential measures. The third lesson is applicable to China and much of Asia now. With interest rates low in the west and likely to stay that way for some time, money is likely to flow east. This is likely to feed the asset-price inflation, perhaps on some government bond markets, and also in equities and real estate. Asia needs to heed such warning signs and not only take on board avoiding cheap money but also do more in terms of accepting greater currency flexibility and moving towards deepening and broadening its capital markets.<br /> <br /> <br /> State capitalization and the role of the state are likely to be a future dominant issue. The crisis also<br /> <br /> <br /> </span></div> </div> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: right;"> <div align="justify"> <span style="font-size:12px;"> saw a desire by some financial firms to secure anchor shareholders. There is a need for long term players. Perhaps the most important policy issue is the need for an international approach to regulatory issues. The trade-off between an international approach and domestic agenda is an important one. One can understand on domestic economic grounds why now there are differences in macro policy. While deflation is a risk in the West, the East is characterized by inflation. Yet on financial issues, given the contagion that was witnessed during the crisis, an international approach is the key. Thus we have seen the move to G20 and the Financial Stability Board (FSB) and this was reflected in the Basel III announcement.<br /> <br /> <br /> In conclusion, the three key words are- debt, and the need to minimize it; liquidity, and the need for financial institutions to have sufficient amount; and the importance of policy makers to send the right incentives. (The writer is Chief Executive Officer, Standard Chartered Bank Nepal Ltd.)<br /> <br /> </span></div> </div> <div style="clear: both;"> <span style="font-size:12px;"><br /> </span></div> </div> </div> </div>', 'published' => true, 'created' => '2010-12-24', 'modified' => '2012-09-20', 'keywords' => '', 'description' => 'In order to derive a proper understanding, it is important to look at this crisis in context. It is evident that a shift in the balance of power is underway i.e. from the West to the East.', 'sortorder' => '51', 'image' => null, 'article_date' => '0000-00-00 00:00:00', 'homepage' => false, 'breaking_news' => false, 'main_news' => false, 'in_scroller' => false, 'user_id' => '0' ) ), (int) 1 => array( 'Article' => array( 'id' => '102', 'article_category_id' => '37', 'title' => 'Four Months Wait For BUDGET Is Over', 'sub_title' => '', 'summary' => null, 'content' => '<div style="width: 595px;"> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: left;"> <div align="justify"> <span style="width: 100%;">Nepal's caretaker government has finally managed to bring out the annual budget by issuing an Ordinance after a delay of four months from the date the fiscal year strated. Giving continuity to most of the ongoing programs, Finance Minister Surendra Pandey, announced the budget of Rs 337.9 billion for the fiscal year 2010/11. It is an increment of 18 per cent compared to last year's budget of Rs 285.9 billion. <br /> <br /> The government has allocated 56.3 per cent of the total budget for recurrent expenditure, 38.3 per cent for capital expenditure and 5.4 per cent for principal repayment. The estimated spending is 30.4 per cent more than the revised estimate of expenditure of the previous year. In terms of the structure of the expenditure, recurrent expenditure has increased by 25.8 per cent and capital expenditure by 44.8 per cent.<br /> <br /> To meet the expenditures, the government aims to mobilize Rs 216.64 billion from revenue and Rs 65.35 billion from foreign grants. Deficit of Rs 55.91 billion is expected to be covered from foreign loans of Rs 22.23 billion and domestic borrowings of Rs. 33.68 billion. The amount of proposed foreign loans is 2.6 per cent of the estimated GDP.<br /> <br /> A review of the first quarter's revenue collection of the current fiscal year makes it challenging to meet the revenue target of the budget. It, therefore, seems an uphill task to meet the target of 4.5 per cent economic growth. Last year's budget had targeted 5.5 per cent economic growth but the actual achievement was 3.5 per cent. The new budget expects inflation to be around 8 per cent. It is higher than this year's monetary policy's target of 7.5 per cent. <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> </span></div> </div> <div align="justify" style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: right;"> <strong>Major Highlights of the Budget</strong><br /> <br /> <div style="padding: 0pt 0pt 0pt 5px;"> 01. More allocations for the infrastructure projects <br /> like Kathmandu-Terai fast track road, Mid-hills <br /> highway, Sikta and Ranijamara irrigation, <br /> Syafrubesi-Rasuwagadi road track, Upper <br /> Tamakoshi hydropower, etc.<br /> <br /> <br /> 02. Rs 500 thousand cash for the organizers of <br /> seminar or workshop involving more than 100 <br /> foreign passport holders entering Nepal <br /> through air-route once at a time<br /> <br /> <br /> 03. Provision of sub health post and police post <br /> for the productive industry that offers <br /> employment to more than 500 Nepali workers.<br /> <br /> <br /> 04. Black-topped roads reaching the premises of <br /> manufacturing companies employing more <br /> than 100 Nepali people.<br /> <br /> <br /> 05. Lands to be classified into six categories: <br /> agricultural, industrial, forestry, commercial, <br /> residential and public community. Ownership <br /> certificates to be issued accordingly.<br /> <br /> <br /> 06. Construction of large and medium sized <br /> reservoirs based hydropower projects at least <br /> one in every Development Region.<br /> <br /> <br /> 07. Two per cent incentive on equivalent Nepali <br /> currency to exporters on submission of bank <br /> documents showing that they have received <br /> convertible currencies earned from the <br /> exports. Incentive will be three percent and <br /> higher if the value addition of exported <br /> commodities exceeds 50 per cent or higher. <br /> They will also get 25 per cent income tax <br /> exemption.<br /> <br /> <br /> 08. Door opens for Non-resident Nepalis to invest <br /> in the capital market.<br /> <br /> <br /> 09. E-tendering made mandatory from 14 April <br /> 2011 onwards for all the contracts and tenders <br /> of more than Rs 20 million.<br /> <br /> <br /> 10. Merger of banks, finances and insurance <br /> companies encouraged. Changes in the <br /> provision of taxing assets and liabilities as <br /> deposal after merger will be introduced to <br /> make it non-taxable, and special <br /> arrangements have been made for share <br /> holders, managers and employees.</div> </div> <div style="clear: both;"> </div> </div> <div style="width: 595px;"> <img alt="" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/table-of-i-nc(1).jpg" /></div>', 'published' => true, 'created' => '2010-12-24', 'modified' => '2012-09-20', 'keywords' => '', 'description' => 'Nepal’s caretaker government has finally managed to bring out the annual budget by issuing an Ordinance after a delay of four months from the date the fiscal year started.', 'sortorder' => '50', 'image' => null, 'article_date' => '0000-00-00 00:00:00', 'homepage' => false, 'breaking_news' => false, 'main_news' => false, 'in_scroller' => false, 'user_id' => '0' ) ) ) $current_user = null $logged_in = false $xml = falseinclude - APP/View/Elements/side_bar.ctp, line 133 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::_renderElement() - CORE/Cake/View/View.php, line 1224 View::element() - CORE/Cake/View/View.php, line 418 include - APP/View/Articles/index.ctp, line 157 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 968 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 117
Warning (2): simplexml_load_file() [<a href='http://php.net/function.simplexml-load-file'>function.simplexml-load-file</a>]: I/O warning : failed to load external entity "" [APP/View/Elements/side_bar.ctp, line 133]file not found!Code Context// $file = 'http://aabhiyan:QUVLg8Wzs2F7G9N7@nepalstock.com.np/api/subindexdata.xml';if(!$xml = simplexml_load_file($file)){$viewFile = '/var/www/html/newbusinessage.com/app/View/Elements/side_bar.ctp' $dataForView = array( 'articles' => array( (int) 0 => array( 'Article' => array( [maximum depth reached] ) ), (int) 1 => array( 'Article' => array( [maximum depth reached] ) ) ), 'current_user' => null, 'logged_in' => false ) $articles = array( (int) 0 => array( 'Article' => array( 'id' => '103', 'article_category_id' => '37', 'title' => 'Lessons From The Global Crisis', 'sub_title' => '', 'summary' => null, 'content' => '<div style="width: 595px;"> <div justify="" style="width: 595px;"> <div> <div align="center" style="border: 1px solid rgb(204, 204, 204); padding: 5px;"> <div align="left"> <span style="font-size:12px;">The key lessons from the recent global financial crisis could be divided under three heads:<br /> <br /> Economic lessons<br /> <br /> Financial lessons<br /> <br /> Policy lessons<br /> </span></div> </div> </div> </div> <p> <span style="font-size:12px;"><br /> </span></p> <div style="width: 595px;"> <div justify="" style="width: 595px;"> <div> <div align="center" style="border: 1px solid rgb(204, 204, 204); padding: 5px;"> <div align="left"> <span style="font-size:12px;">Overall, we need to learn that the key economic lesson of this crisis is to avoid too much debt.</span></div> </div> </div> </div> <span style="font-size:12px;"><br /> </span> <div style="width: 595px;"> <div justify="" style="width: 595px;"> <div> <div align="center" style="border: 1px solid rgb(204, 204, 204); padding: 5px;"> <div align="left"> <span style="font-size:12px;">The banks that came out of the crisis unscathed were well capitalized, had ample liquidity and had strategies that were customer focused. In many respects, they could be termed conservatively run.</span></div> </div> </div> </div> <span style="font-size:12px;"><br /> </span> <div style="width: 595px;"> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: left;"> <div align="justify"> <span style="font-size:12px;"><strong>ECONOMIC LESSONS </strong><br /> In order to derive a proper understanding, it is important to look at this crisis in context. It is evident that a shift in the balance of power is underway i.e. from the West to the East. Though it will take time, the beneficiaries in this shift are countries with good financial resources, natural resources or the ability to adapt/ change. Thus the winners will have cash, commodities or creativity. The West, having seen an era of excess now encounters an era of austerity. In contrast, emerging economies have enjoyed an era of boom and are now in need of investment. These macro-trends will have a significant bearing on the postcrisis debate. In the UK, for instance, the debate over the banking and financial sector still has some way to go. A few years ago there was at least a general agreement that the financial sector was good for the economy. Now there are questions if the banking/ financial sector is good or bad. The danger in that debate is that commercial banks that facilitate much business and trade will be squeezed. In the US, Paul Volcker has not only produced his own plan for the financial sector but last year he also said the only socially useful innovation from banks had been the ATM machine. This links into the wider debate over innovation vs. regulation and getting the balance right. For Asia, the debate is different. Relative to the challenges in the banking sector in the west, this is an opportunity. But, relative to the macro-economic environment and outlook in Asia, there are challenges. For instance, the cost of future public sector investment is huge, estimated at over eight trillion dollars. Then there is the issue of capital flows and how to manage this, which links into the</span></div> </div> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: right;"> <div align="justify"> <span style="font-size:12px;">need for Asia to deepen and broaden its capital markets. The outlook for the banking and financial sector cannot be viewed in isolation from the macro-economic climate. <br /> There is a genuine risk of a double-dip, slipping back into recession, although a weak recovery is more likely. A double dip could occur if there was a policy mistake, an external shock or a loss of confidence. But the world economy is experiencing a shift, with more of global growth driven by emerging economies. Whilst, it is important not to underestimate the downside risks from debt and deleveraging in the West, looking at levels gives a different perspective. A decade ago, the size of the world economy was $ 31 trillion. On the eve of the crisis, it had risen to $ 61 trillion collapsing during the crisis to $ 58 trillion. Now it is back to pre-crisis levels. Global trade peaked in 2008, collapsing 21 per cent by May 2009. Since then trade has almost recovered to pre-recession levels reaching 98 per cent of that level by June 2010. The world economy is not decoupled. The collapsing trade had highlighted the inter-connectedness of the world economy. Although it was a crisis made in the West, it has had global implications. But the key lesson from this crisis is debt, too much debt. Although there were many characteristics of this crisis that were different from the previous ones, the fundamental cause was the same: too much debt. In fact, there are a number of factors linked to this. The crisis witnessed a lethal combination of debt, leverage and gearing combined with easy money and with one way.<br /> <br /> <br /> </span></div> </div> <div style="clear: both;"> <span style="font-size:12px;"><br /> </span></div> </div> </div> </div> </div> <div style="width: 595px;"> <span style="font-size:12px;"><br /> </span> <div style="width: 595px;"> <div style="width: 595px;"> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: left;"> <div align="justify"> <span style="font-size:12px;"><strong>FINANCIAL LESSONS <br /> </strong><br /> The main financial lesson of the crisis is liquidity. The crisis was triggered by a combination of factors: an imbalanced global economy, a failure to heed to warning signs and a systemic failure of the financial system. A strong rebound seen in banks over the last year has occurred in an environment where the global policy stimulus has been huge. Now, a more difficult time lies ahead as it becomes clear that the recovery in the West is weak, adding to the pressure on banks to lend. To heed the lessons for the financial sector, it is important to learn lessons from those that failed and also recognize that not all broke, even in the city of London, and there are lessons to learn from where things worked well. The banks that came out of the crisis unscathed were well capitalized, had ample liquidity and had strategies that were customer focused. In many respects, they could be termed “conservatively runâ€. There were also lessons to learn from countries that had a good crisis e.g. Australia and Canada benefitted from effective supervision. There are also important lessons to learn from Asia, including China, particularly in the case of macroprudential measures. <br /> <br /> These are specific and targeted measures that</span></div> </div> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: right;"> <div align="justify"> <span style="font-size:12px;">worked well. They included reserve requirements for banks and specific measures that could, for instance, be aimed at real estate such as Loan to Value ratios. The potential effectiveness of macroprudential measures needs to be fully appreciated. They can be effective especially if used alongside appropriate monetary policies. There are also important lessons to learn from those institutions that failed. It came out loud and clear that there was a failure of corporate governance. In particular, senior managements and Boards did not guard against excessive risk-taking. This was particularly relevant with respect to liquidity. Some banks thought they didn't need much liquidity possibly because they thought risks were low or that Central Bank could help. The scale of the unregulated financial sector was also a distinctive result as the crisis unfolded. Hence, the needs for regulators to widen the scope of their regulatory remit. There was a lack of risk management, lack of liquidity management and procyclical behavior that added fuel to the fire. Capital reserves were built on artificially low default risks. And, when the crisis broke, mark to market triggered both asset write-downs and panic selling. So there are many financial lessons from the crisis but the key is liquidity.</span></div> </div> <div style="clear: both;"> <span style="font-size:12px;"><br /> <br /> </span></div> </div> </div> </div> <div style="width: 595px;"> <div style="width: 595px;"> <div style="width: 595px;"> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: left;"> <div align="justify"> <span style="font-size:12px;"><strong>POLICY LESSONS <br /> <br /> </strong>The first lesson is, avoid cheap money. This encourages the buildup of debt especially where debt is subsidized by favorable tax treatment as was the case in the US. Avoiding cheap money doesn't mean that there will not be occasions when interest rates should be low as in the West now. <br /> <br /> <br /> The second lesson: learn the lessons from Asia and make effective use of macro-prudential measures. The third lesson is applicable to China and much of Asia now. With interest rates low in the west and likely to stay that way for some time, money is likely to flow east. This is likely to feed the asset-price inflation, perhaps on some government bond markets, and also in equities and real estate. Asia needs to heed such warning signs and not only take on board avoiding cheap money but also do more in terms of accepting greater currency flexibility and moving towards deepening and broadening its capital markets.<br /> <br /> <br /> State capitalization and the role of the state are likely to be a future dominant issue. The crisis also<br /> <br /> <br /> </span></div> </div> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: right;"> <div align="justify"> <span style="font-size:12px;"> saw a desire by some financial firms to secure anchor shareholders. There is a need for long term players. Perhaps the most important policy issue is the need for an international approach to regulatory issues. The trade-off between an international approach and domestic agenda is an important one. One can understand on domestic economic grounds why now there are differences in macro policy. While deflation is a risk in the West, the East is characterized by inflation. Yet on financial issues, given the contagion that was witnessed during the crisis, an international approach is the key. Thus we have seen the move to G20 and the Financial Stability Board (FSB) and this was reflected in the Basel III announcement.<br /> <br /> <br /> In conclusion, the three key words are- debt, and the need to minimize it; liquidity, and the need for financial institutions to have sufficient amount; and the importance of policy makers to send the right incentives. (The writer is Chief Executive Officer, Standard Chartered Bank Nepal Ltd.)<br /> <br /> </span></div> </div> <div style="clear: both;"> <span style="font-size:12px;"><br /> </span></div> </div> </div> </div>', 'published' => true, 'created' => '2010-12-24', 'modified' => '2012-09-20', 'keywords' => '', 'description' => 'In order to derive a proper understanding, it is important to look at this crisis in context. It is evident that a shift in the balance of power is underway i.e. from the West to the East.', 'sortorder' => '51', 'image' => null, 'article_date' => '0000-00-00 00:00:00', 'homepage' => false, 'breaking_news' => false, 'main_news' => false, 'in_scroller' => false, 'user_id' => '0' ) ), (int) 1 => array( 'Article' => array( 'id' => '102', 'article_category_id' => '37', 'title' => 'Four Months Wait For BUDGET Is Over', 'sub_title' => '', 'summary' => null, 'content' => '<div style="width: 595px;"> <div style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: left;"> <div align="justify"> <span style="width: 100%;">Nepal's caretaker government has finally managed to bring out the annual budget by issuing an Ordinance after a delay of four months from the date the fiscal year strated. Giving continuity to most of the ongoing programs, Finance Minister Surendra Pandey, announced the budget of Rs 337.9 billion for the fiscal year 2010/11. It is an increment of 18 per cent compared to last year's budget of Rs 285.9 billion. <br /> <br /> The government has allocated 56.3 per cent of the total budget for recurrent expenditure, 38.3 per cent for capital expenditure and 5.4 per cent for principal repayment. The estimated spending is 30.4 per cent more than the revised estimate of expenditure of the previous year. In terms of the structure of the expenditure, recurrent expenditure has increased by 25.8 per cent and capital expenditure by 44.8 per cent.<br /> <br /> To meet the expenditures, the government aims to mobilize Rs 216.64 billion from revenue and Rs 65.35 billion from foreign grants. Deficit of Rs 55.91 billion is expected to be covered from foreign loans of Rs 22.23 billion and domestic borrowings of Rs. 33.68 billion. The amount of proposed foreign loans is 2.6 per cent of the estimated GDP.<br /> <br /> A review of the first quarter's revenue collection of the current fiscal year makes it challenging to meet the revenue target of the budget. It, therefore, seems an uphill task to meet the target of 4.5 per cent economic growth. Last year's budget had targeted 5.5 per cent economic growth but the actual achievement was 3.5 per cent. The new budget expects inflation to be around 8 per cent. It is higher than this year's monetary policy's target of 7.5 per cent. <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> </span></div> </div> <div align="justify" style="border: 1px solid rgb(204, 204, 204); padding: 5px; width: 47%; float: right;"> <strong>Major Highlights of the Budget</strong><br /> <br /> <div style="padding: 0pt 0pt 0pt 5px;"> 01. More allocations for the infrastructure projects <br /> like Kathmandu-Terai fast track road, Mid-hills <br /> highway, Sikta and Ranijamara irrigation, <br /> Syafrubesi-Rasuwagadi road track, Upper <br /> Tamakoshi hydropower, etc.<br /> <br /> <br /> 02. Rs 500 thousand cash for the organizers of <br /> seminar or workshop involving more than 100 <br /> foreign passport holders entering Nepal <br /> through air-route once at a time<br /> <br /> <br /> 03. Provision of sub health post and police post <br /> for the productive industry that offers <br /> employment to more than 500 Nepali workers.<br /> <br /> <br /> 04. Black-topped roads reaching the premises of <br /> manufacturing companies employing more <br /> than 100 Nepali people.<br /> <br /> <br /> 05. Lands to be classified into six categories: <br /> agricultural, industrial, forestry, commercial, <br /> residential and public community. Ownership <br /> certificates to be issued accordingly.<br /> <br /> <br /> 06. Construction of large and medium sized <br /> reservoirs based hydropower projects at least <br /> one in every Development Region.<br /> <br /> <br /> 07. Two per cent incentive on equivalent Nepali <br /> currency to exporters on submission of bank <br /> documents showing that they have received <br /> convertible currencies earned from the <br /> exports. Incentive will be three percent and <br /> higher if the value addition of exported <br /> commodities exceeds 50 per cent or higher. <br /> They will also get 25 per cent income tax <br /> exemption.<br /> <br /> <br /> 08. Door opens for Non-resident Nepalis to invest <br /> in the capital market.<br /> <br /> <br /> 09. E-tendering made mandatory from 14 April <br /> 2011 onwards for all the contracts and tenders <br /> of more than Rs 20 million.<br /> <br /> <br /> 10. Merger of banks, finances and insurance <br /> companies encouraged. Changes in the <br /> provision of taxing assets and liabilities as <br /> deposal after merger will be introduced to <br /> make it non-taxable, and special <br /> arrangements have been made for share <br /> holders, managers and employees.</div> </div> <div style="clear: both;"> </div> </div> <div style="width: 595px;"> <img alt="" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/table-of-i-nc(1).jpg" /></div>', 'published' => true, 'created' => '2010-12-24', 'modified' => '2012-09-20', 'keywords' => '', 'description' => 'Nepal’s caretaker government has finally managed to bring out the annual budget by issuing an Ordinance after a delay of four months from the date the fiscal year started.', 'sortorder' => '50', 'image' => null, 'article_date' => '0000-00-00 00:00:00', 'homepage' => false, 'breaking_news' => false, 'main_news' => false, 'in_scroller' => false, 'user_id' => '0' ) ) ) $current_user = null $logged_in = false $xml = falsesimplexml_load_file - [internal], line ?? include - APP/View/Elements/side_bar.ctp, line 133 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::_renderElement() - CORE/Cake/View/View.php, line 1224 View::element() - CORE/Cake/View/View.php, line 418 include - APP/View/Articles/index.ctp, line 157 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 968 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 117
| Currency | Unit |
Buy | Sell |
| U.S. Dollar | 1 | 121.23 | 121.83 |
| European Euro | 1 | 131.65 | 132.31 |
| UK Pound Sterling | 1 | 142.47 | 143.18 |
| Swiss Franc | 1 | 124.29 | 124.90 |
| Australian Dollar | 1 | 71.69 | 72.05 |
| Canadian Dollar | 1 | 83.90 | 84.32 |
| Japanese Yen | 10 | 10.94 | 11.00 |
| Chinese Yuan | 1 | 17.17 | 17.26 |
| Saudi Arabian Riyal | 1 | 32.27 | 32.43 |
| UAE Dirham | 1 | 33.01 | 33.17 |
| Malaysian Ringgit | 1 | 27.36 | 27.50 |
| South Korean Won | 100 | 9.77 | 9.82 |
Update: 2020-03-25 | Source: Nepal Rastra Bank (NRB)
| Fine Gold | 1 tola | 77000.00 |
| Tejabi Gold | 1 tola | 76700.00 |
| Silver | 1 tola | 720.00 |
Update : 2020-03-25
Source: Federation of Nepal Gold and Silver Dealers' Association
| Petrol | 1 Liter | 106.00 |
| Diesel | 1 Liter | 95.00 |
| Kerosene | 1 Liter | 95.00 |
| LP Gas | 1 Cylinder | 1375.00 |
Update : 2020-03-25
