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Analysis

Tackling the next banking crisis today

Written by Gavin Chait
13
May
2010

Making a depositThe global financial crisis has not changed the nature of economic transactions.  What it has shown is the shortcomings in risk assessment and quantification as well as the difficulties of legislating and regulating that risk.

The three main challenges faced by regulators, politicians and the institutions themselves are as follows: restoring consumer trust both in banks and service providers, as well as those who would regulate and guarantee trust in these institutions;  reducing financiers’ perceived lending risk to restore the availability of liquidity to businesses and entrepreneurs in order to encourage job creation and market growth; and, stimulating innovation and competition in financial services to consumers  to reduce market concentration by a few large banks.

Read more: Tackling the next banking crisis today
 

Paying for Climate Change with a Carbon VAT

Written by Gavin Chait
06
May
2010

Peril on the beachesTaxation is a form of insurance where the benefits are inverted.  The intention is that these transfers be investments allowing the poor to improve their prospects and, eventually, become tax-payers.  The reality is that, in most countries, the poor are not so mobile and cash transfers are not so much investments as entitlements.

As politicians incrementally shift the tax burden up the income brackets they include more people as net beneficiaries and fewer people as net payers.  The credit crisis hurt governments so badly because, not only were banks destabilised, but their employees are the high-net-worth individuals who form the bulk of the tax-base.  As banks crashed so did tax receipts.

Read more: Paying for Climate Change with a Carbon VAT
   

Governments which demand to be the only investor can steal their citizens' savings

Written by Gavin Chait
29
Apr
2010

When the strong overpower the weakThe world’s 300 largest pension funds have managed assets worth almost $9 trillion.  That’s a one with 12 zeros.  And they’re not all based entirely in the rich North.  South Africa’s Government Employees Fund is – with $96 billion – one of the 20 largest in the world.

Read more: Governments which demand to be the only investor can steal their citizens' savings
   

Poverty and the capacity for technology to bring Change

Written by Gavin Chait
22
Apr
2010

I see you..."The capacity for technology to drive change is limited by two things: the will of the people who use that technology to demand change; and whether governments are willing to murder their own citizens in order to prevent change."

I was speaking as part of a panel at the IESE Doing Good and Doing Well conference in Barcelona.  Our topic was "Does Information Equal Power?"

Read more: Poverty and the capacity for technology to bring Change
   

Reducing risk for the poorest of the unbanked and uninsured

Written by Gavin Chait
15
Apr
2010

Mass micro lendingThe range of interest rates applied to micro-credit loans can be chilling.  45% to 85% in Africa, 30% in India and a jaw-dropping 155% in Mexico.

“What should be the appropriate rate of interest?” thunders Jacques Toureille, general manager at the Aga Khan Agency for Microfinance.  The occasion is the Doing Good and Doing Well conference hosted by IESE Business School in Barcelona, Spain.

Read more: Reducing risk for the poorest of the unbanked and uninsured
   

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