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.

IMF Defers to US on Debt Ceiling and Tapering, Ignores Questions on Sudan, Iran, Areva & Niger, Dodges on Lagarde Being Grilled

By Matthew Russell Lee

UNITED NATIONS, February 6 -- Money talks. The International Monetary Fund on February 6 was asked about the US debt ceiling, and about how Federal Reserve moves have hurt emerging markets. To both questions, IMF spokesperson Gerry Rice said these are entirely matters for the US authorities: the IMF wouldn't dare to make suggestions.

  Of course, with other countries the IMF does nothing BUT make suggestions, requiring raises in taxes and cuts in pensions, for example, as a condition for tapping assistance.

  And then the IMF too often does not even take questions about such countries. Even Gerry Rice acknowledged, at the end of the July 6 bi-weekly briefing, that he had been remiss in taking online questions from journalists not in the room in Washington. (His solution was to take a question on another European country, Portugal.) 

   On Ukraine, Rice said the IMF is ready with "support" for economic reforms that would "revive growth." He said the IMF is always independence, "as you know."

  Inner City Press from the UN submitted questions on South Sudan, Iran, Armenia, Romania and Niger, where French firm Areva is being asked to stop under-paying for uranium. Rice did not take this question; he also dodged or deferred a question about Christine Lagarde being questioned by French investigators on January 31.

In fairness, the IMF is not always unresponsive. Two weeks ago, just for example, they answered  the Press on Afghanistan. The blind spot most often seems to be Africa. We'll have more on this.