GalaTime

• Bloomberg: Fed’s Bear Stearns Books Look Prime for Cooking

The Fed doesn’t follow normal accounting rules, as promulgated by any of the major standard-setting boards. Rather, the Fed writes its own, in a document called the Financial Accounting Manual for Federal Reserve Banks. If you ever wanted to design an accounting regime to help a bank cook its books, the Fed’s would be perfect.

If the Fed were a normal bank, it probably would have to put the Delaware special-purpose entity’s assets and liabilities on its own balance sheet, under the Financial Accounting Standards Board’s rules. The reason is that the Fed will bear most of the risk of losses. Under the Fed’s 161-page accounting manual, however, there’s no such requirement. That’s because the manual doesn’t have any rules on the subject.

How nice - make up accounting rules as you go.

• Business Standard: Real estate pushes up PSU bank lending to sensitive sectors

The steeper growth in advances to the sensitive sectors has meant that PSU banks’ share rose to 17 per cent of the total bank credit of Rs 13,76,958 crore at the end of March 2008.

A part of the reason for higher real estate exposure is the classification of big-ticket home loans — upwards of Rs 20 lakh till March 2008 — in this bracket. While private banks have scaled down their retail lending operations, partly due to rising defaults, the public sector players have stepped up the pace.

Central Bank has the highest exposure to capital markets — almost 29 per cent of its net worth — followed by Union Bank (24.77 per cent), Syndicate Bank (20.61 per cent), State Bank of Travancore (20.54 percent), PNB (20.30 per cent) and SBI (18.58 per cent). As per the new RBI norms, the aggregate exposure of a bank to the capital markets should not exceed 40 per cent of its net worth.

With interest rates unlikely to decline, what are expected NPAs for the sub-20 lakh loans? Is this our sub-prime?

• Mint: Insiders say infighting led to BSE resignations

The resignations of the Bombay Stock Exchange (BSE) chairman Shekhar Datta and a director, Jamshed Godrej, is a culmination of intense infighting in the 12-member board of Asia’s oldest exchange.

. . . the board members are clearly divided into two camps and have been fighting on several issues ranging from BSE’s Rs100 crore investment in Calcutta Stock Exchange, a Rs200 crore technology upgrade programme and a 26% stake purchase in Ahmedabad-based National Multi-Commodities Exchange.

. . . there has been deep resentment among some members of the exchange on the lost opportunity of running the corporate debt market in India which was initially awarded solely to BSE by the capital market regulator.

BSE has a miniscule share of F&O trading. And try getting historical EOD data from their website.

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