It’s a Global Village :
It’s a Global Village Key Drivers
World Trade Growth (see Annexure 1)
International Finance Capital
Growth of MNC (control $ 30 Trillion out of $ 65 Trillion global GDP)
Enablers
Technology
Transportation & Logistics
Strategic questions … :
Strategic questions … Capitalist (for Profit) and Socialist (for Losses)?
Reserve Currency – Why US $ ?
Efficient Market Hypothesis
Role of Global Institutions – IMF, World Bank etc
Role of Individual Govt. vs. the World.
Need for a Global Regulator vs Country Regulator?
Risk Management vs Financial Innovations
“Greed is Good”…Really?
Impact on INDIA :
Impact on INDIA The Good Part
Domestic Demand driven Economy : Export/GDP at 25% (China 40%)
Well –diversified export portfolio (See Annexure 2)
Inflation is down : Commodity
Stable Banking System : No Bankruptcies
Prudent Lending Norms : No Subprimes Crises
Services driven economy The Trouble is …
Liquidity Crunch and Cost of Capital
Project delay/postponement
Forex Reserves flucuations – FII withdrawl
Exports – Challenging Global Demand scenario
Ironically, $ is currency of choice !!
GDP Projections lowered
Impact on Indian Banking System :
Impact on Indian Banking System Short Term (next 12 months)
– Watchful, reactive to global and national events.
Medium Term (1-3 Year)
Various national regulators – Reserve Bank of India, SEBI, IRDA, MoF will stay hawkish
Entry of MNC Banks to India will be delayed/abandoned
PSU Banks will get stronger and spread overseas.
FII Inflow in Indian Markets, PE deals
Retail Banking will revive
NBFC will have to find new Business avenues/models
ThankYouE –mail : chhitiz@yahoo.comLinkedIn : http://www.linkedin.com/in/chhitizMobile : +91 - 9711013990 :
ThankYouE –mail : chhitiz@yahoo.comLinkedIn : http://www.linkedin.com/in/chhitizMobile : +91 - 9711013990
Annexure 1 -World Trade (in $ Bn) :
Annexure 1 -World Trade (in $ Bn) Source : WTO, 2008 Report
Slide 8:
Annexure 2