India's internal politics of coalition-centered government makes for an interesting discussion. Is it favorable? Is it effective? What are the tradeoffs?
In terms of the relations between the state and society, how does the coalition structure affect society's relationships with the state?
I imagine myself as an Indian voter. I would be absolutely confused by the plethora of parties demanding my vote. The constant campaigning going on would also make me pretty fed up with the drain on my time trying to make sense of it all. I might even ignore the whole thing. Why waste time when I could be catching up on my ZZZs?
Agree? Disagree?
Friday, February 13, 2009
Economics on 12th Feb: Fractional Reserve Banking
This post is taken from my post on yahoo.
During the economics class, I was surprised we didn't even go into the philosophy behind why fractional reserve banking was required at all. Do we really need banks to match savings and investment?
http://unqualified-reservations.blogspot.com/2008/09/maturity-transformation-con\
sidered.html
There's something very smelly about the fact that depositors cannot withdraw their hard-earned money without the whole edifice collapsing. As for lending for investment, that can still be accomplished by financial intermediaries that match people with excess funds with entrepreneurs, on the understanding that they are risking their money.
True banks serving the warehouse/deposit box function (for essentially security reasons; you don't want to keep 50,000 dollars in your own home) should not engage in all the activities we see now, and only charge for the operating costs of the infrastructure, tellers, security guards etc, while maintaining near 100% reserve ratio.
What do you think?
During the economics class, I was surprised we didn't even go into the philosophy behind why fractional reserve banking was required at all. Do we really need banks to match savings and investment?
http://unqualified-reservations.blogspot.com/2008/09/maturity-transformation-con\
sidered.html
There's something very smelly about the fact that depositors cannot withdraw their hard-earned money without the whole edifice collapsing. As for lending for investment, that can still be accomplished by financial intermediaries that match people with excess funds with entrepreneurs, on the understanding that they are risking their money.
True banks serving the warehouse/deposit box function (for essentially security reasons; you don't want to keep 50,000 dollars in your own home) should not engage in all the activities we see now, and only charge for the operating costs of the infrastructure, tellers, security guards etc, while maintaining near 100% reserve ratio.
What do you think?
First Post!
Okay people, instead of just hanging around waiting for this to happen, I figured instead of cluttering up yahoo, I'd just start a blog where we can discuss stuff that's touched upon in class. Posts will center around core modules taken by everybody.
I'm admin for now, and I'll add in posts on each lesson.
Pls do inform me if you want to be able to post, instead of just adding to the comments.
I'm admin for now, and I'll add in posts on each lesson.
Pls do inform me if you want to be able to post, instead of just adding to the comments.
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