The Financial Express -- Expressions

This page contains Editorial and Op-Ed articles

Saturday, October 4 1997

Letters to the Editor

Changing insurance scenario

Tariff which is required to be mandatory, should be made recommendatory. Self regulation among the insurers is also one of the aspects of "excellence in products." Benefits in the form of various discount- due to good risk management practices may be given. Intermediaries like qualified insurance Agents and brokers should be given licences due to complexity of production processes and concentrations of high values at the risk.

Derivatives provide risk cover

Exposures of corporates are not only to the forex markets but also to interest rate and maturity mismatches and in a regime of CAC, corporates and banks would need to recognise that as the economy opens up interest rates would progressively be market determined and that need to be prepared to deal with these risks.

Evolving fiscal sustainability

Another interpretation of sustainability of fiscal policy is ensuring the government's solvency constraint which requires that in an inter-temporal budget constraint, the present value of future government revenues equals the sum of the outstanding debt and the present value of the future stream of expenditure. Buiter (1985) evaluated the government as solvent when the present value of expected terminal net liabilities (i.e., indebtedness at the end of the planning horizon) is zero.

Changing insurance scenario

Derivatives provide risk cover

India bowled over by Japan's friendly mask

Evolving fiscal sustainability

Protecting weaker banks

Consolidation in pharma