By Matthew Russell Lee
UNITED NATIONS, February 20 -- In the wake of the global financial meltdown, one expected most advice to regulators to consist of being more stringent.
But today's International Monetary Fund "Article IV" report on India, under embargo until 9 am, says at page 12 for example that "the relaxation of restrictions that reduce the depth of the onshore forwards and futures markets would be beneficial."
The specific restriction that IMF is urging to relax are described in a footnote as "restrictions includ[ing that] banks have been banned from proprietary trading in domestic currency futures and exchange traded options; margin requirements on domestic U.S. dollar-rupee forward trades were doubled to 100 percent; and FIIs and NRIs cannot trade currency futures in India."
So a ban on propriety trading in India, the IMF wants to be relaxed? By contrast, when asking nearly anything about the United States -- about the debt ceiling, for example, or more recently tapering - the IMF says that it entirely a domestic matter to be decided by domestic authorities.
And questions posed by Inner City Press two weeks ago, for example about the crisis in South Sudan (where Indian peacekeepers are serving, and have this year been killed) remain unanswered. (In fairness, a question on Romania was belatedly answered, and reported here.)
On his way to last April's International Monetary Fund - World Bank meetings in Washington, India's Finance Minister P. Chidambaram stopped in New York City on Wednesday, and Inner City Press asked him about IMF reform. Video here.
Inner City Press asked specifically about quota and governance reform. Chidambaram replied that the “review is incomplete because the US has not voted.”
And that remains the case, ten months later. Watch this site.