Friday, August 08, 2008
RBI report on interest rate futures
RBI has come out with a committee report. It fixes the ban on bank participation that snarled up interest rate futures trading all these years. For the rest, it's disappointing; years have been spent in writing something that a competent finance practitioner could have written (sans the mistakes) in an afternoon. Employees of the government are still doing product design, prescribing what hours trading should take place, tinkering with central planning about how participant of type X cannot engage in activity Y, etc. It is not imbued with the vision of the Bond-Currency-Derivatives Nexus. See the `Comment' by Susan Thomas towards the end of the report.