The 1997 Asian Financial Crisis was the crisis that affected many Asian countries in July 1997. The Asian countries affected were Thailand, South Korea, Malaysia, Indonesia, Singapore, and the Philippines. The crisis originated in Thailand. Thailand’s currency Baht collapsed in July 1997: Thailand had a fixed exchange rate system. It had pegged the value of …
What is a trade war? Investopedia defines trade war as, “A negative side effect of protectionism that occurs when Country A raises tariffs on Country B’s imports in retaliation for Country B raising tariffs on Country A’s imports.” Since 2018, the US and China have been engaged in a trade war. This confrontation has led to several rounds of retaliatory tariff increases by …
What is the trade war between US and China?- Explained Read More »
What is a Mutual Fund? A mutual fund is a financial institution which collects money from a large number of investors. The money collected is invested in shares, bonds etc. The income and capital gains earned through these investments are shared amongst the investors (after deducting expenses and levies) in proportion to the number of …
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What is structured finance? In simple words, structured finance is the use of complex financial instruments. Structured financial instruments are riskier It is mostly used by financial institutions and companies with unique financing needs Some examples of structured financial instruments- Derivatives, Mortgage-backed securities (MBS), Collateralised debt obligations (CDO), credit default swaps (CDS), synthetic financial instruments & …
What is meant by Basel norms or Basel accords? Basel norms are international banking regulations issued by the Basel Committee on Banking Supervision (BCBS). The Basel norms is an effort to coordinate banking regulations across the globe, with the goal of strengthening the international banking system. The Basel Committee on Banking Supervision (BCBS) consists of …
A bond is a financial instrument through which a company or government borrows money from the investors at a fixed rate of interest. Effectively, when you are buying a bond, you are lending money to the Government or the company. To illustrate– a company wants to borrow Rs.100 for 10 years. It can issue …
What are bond yield & the yield curve? – Explained Read More »
When America sneezes, the world catches a cold. Earlier this week, in America, the Dow Jones Industrial Average witnessed two successive one-day falls– one for 666 points and the other for 1175 points. It was the largest one-day fall in its history. In percentage terms, the decline was 4.6 %. It created ripples across global markets. The stock markets in Europe and …
Why the stock markets around the world plunged? – Explained Read More »