In India, As IMF Suggests Relaxing Ban on Proprietary Trading, Gonzo De-Regulation?

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.

India Finance Minister Chidambaram Tells Inner City Press Obama's IMF Reform Vote Delayed, Will Meet Lew

By Matthew Russell Lee

UNITED NATIONS, April 17 -- On his way to the 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.”

  The US has a 17% vote, which can block the required 85% majority.

  Chidambaram continued that “they promised to vote after Obama's swearing in, but it's gotten delayed.” He said he believe “it will happen, but later than we would have liked it to happen.”

  In Washington, Chidambaram will meet with new US Treasury Secreary Jack Lew, formerly of Citigroup. Will he raise India tech visa issues? Apparently not -- he noted that the new bill that has been introduced is 1,500 pages long, adding, “we don't have 1,500 page bills back home.”

  He was asked about corruption, and his answer was that of the twenty questions he has gotten in the past two days, only two were about corruption. He said that up in Boston -- just after the Boston Marathon bombings -- he spoke to MIT, an investor.

Some were surprised he continued with the Boston leg of his trip. Ironically, many international journalists based in New York have been sent up to Boston, to sit writing speculative stories they could have written in New York, or in their own basement, like “tax day is hated by right wingers.” Great insight.

At Chidambaram's press availability, in the Waldorff Towers, a coffee service was waved off; a media based on high frequency stock traders asked a question about its own proprietary data. Was this a sales pitch? In more than one way? Watch this site.