Monday, July 9, 2012


I could have blogged about the drastic changes happening around me. The sudden mail (not actually, as I was all finger-biting-anxiously-waiting for it), the great experience I then had at work on how to actually deal with the most practical challenges, traveling back to the place I hated the most on the Earth (yes & it even takes credit for being the most sought or rather talked after city in my blog too!) I mean how come I didn't blog about the place I loved the most (my good old hyderabad) & just about the city I hated the most! & see the law of attraction & the secret, it actually worked again! So continuing with my list of all those things which iCould  have blogged about, getting back to hostel life, from waiting for weekends & two movies per weekend to no movies for the coming weekends, from meeting new people to feeling the dream come true & actually taking the pride on being n IIFTian now (Yayy!) to actually taking the in hand experience of the super-hectic life which B Schoolers keep talking about to phew! The list just can't get over.
Aren't some lists just meant to be that way, the never-ending things in life, running behind them from one place to other!

P.S. This has to be my fastest post ever, 4 mins flat! :D Talk about time management 8)

Thursday, July 5, 2012

Article Analysis - 1

The Libor Saga – Another blow to finance’s reputation.
(An Analysis of Business Standard Opinion – 5th July 2012)

Records continue to break but finance continues to be a bad game. This time it is the London-based Barclay Bank which participated in the fixing of the London Interbank Offered Rate, popularly known as LIBOR & this article discusses the same in detail.

What actually is LIBOR?
In simplest terms, it is the rate at which money is borrowed. It is also a widely used benchmark for short-term interest rates specially used by US, Canada, Switzerland & UK. It follows a complete process, where it takes the quotes by prominent banks of above countries like Barclays, Union Bank of Switzerland, Citigroup and the Royal Bank of Canada. It then follows a procedure which removes the highest & lowest of the quotes, & releases the final remaining aggregated data.

What was the Controversy about?
In simpler terms, the bank tried to influence the interest rates to suit its own profit from 2005 to 2009. Robert Diamond, the CEO in this period & the chairman Marcus Agius resigned this week as per the article while the bank was fined Rs 2500 Crore.

What were the other consequences?
Apart from London further loosing its value as a financial center, Barclays too lost its image as one of the biggest banks. The fine itself had cost the bank an amount equivalent to half its total dividend payout last year. This affects negatively to its other stakeholders including the shareholders.

However, talking about the Barclay’s side, the article brings into picture the fact that its employees didn’t start with this practice of cooking rates until the financial crsis grew acute & Barclay thought it was paying a higher premium price than others. Though author is quick to add that this is not the complete picture as Barclay’s rate submissions are clearly preferred keeping in mind its schedules.

The author concludes saying that not just the Barclay’s but the complete banking system modified the Libor & thus the need is for harder regulations as well as for understanding the fact that even the top-notch institutes are capable of making bigger scams.