Is this what the chicken meant when it said “The sky is falling”?

From what was a prudent and a well managed firm, Lehman Brothers today has been brought down to its knees. And it is not the first in line- the sad thing here is that there is a line!!

Lehman Brothers has been involved in high-stakes bets and huge borrowings. It had its money in lots of deals with dubious quality they say. …read more

In this piece we would look into latency and proximity services and would try to understand the rational for them.

The market buzz is latency and in order to reduce the latency numbers some of the trading venues have started proximity or co-location services. Latency refers to the round about time taken by an order going out from a trader’s terminal and the return confirmation received from the trading venue on its execution status. …read more

The dismantling of the ‘concentration rule’ has acted as a trigger for the emergence of some of the trends highlighted in the earlier piece. The dismantling, on the one hand, led to a reaction from the stock exchanges to safeguard their business and specifically the liquidity available on their platforms. On the other hand, the dismantling also provided a chance to other players to enter in this business. …read more

A customer wishing to buy a personal loan gets product information on the web, starts with the application over the web, walks up to the branch or a kiosk to continue the process, provide required documentation, and gets an approval on his mobile phone.

Another customer calls in to make payment on his credit card purchases and once the transaction is complete, he is offered a credit card limit increase, the customer accepts the increase happily. …read more

In this piece, we will touch upon the trends affecting the exchange industry (we shall now refer to this industry as “trading venues industry” due to proliferation of trading platform providers like exchanges, multi-lateral trading facilities (MTF), systematic internalizers (SI), electronic communication network (ECN), etc.). These trends have the potential to change the market structure to such an extent that it will not be possible to compare the future and the immediate past scenario. …read more

Greetings!

When the idea of starting a blog was proposed, I had accepted it immediately. The next question is how we make this interesting, useful and self sustaining. Thinking on this led me to a discussion I had long time back with a customer. During a road show, one of the Senior Executives visiting us asked a question “You are away from the operations and industry, so tell me how you keep yourself abreast with what is happening in the Industry…”. The question set me thinking.

We in the IT and consulting industry talk about innovation labs, R&D, Thought Leadership & IP creations that brings value adds to our clients. To be effective these have to stem from the real battle ground which is operations. How do we compensate for this! …read more

Introduction

In this Blog we will be discussing complex Derivatives structures (exotics), their usage, recent fall-out and potential solutions.

Having been Head of Derivatives Technology at Bankers Trust, I will start in the first blog with a lesson from the past: the famous Bankers Trust versus Procter & Gamble case. This happened in 1993 and illustrates how a highly leveraged structured deal can go completely wrong. In subsequent blogs we will discuss the liquidity bubble burst in credit derivatives and the recent Indian FX derivatives hang-over. …read more