TaxTMI 
TaxTMI 
A Call for Enterprise in Economic Data Generation and Information Analytics - Presentation at the 9th Indian Chamber of Commerce Banking Summit, Kolkata
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.... Call for Enterprise in Economic Data Generation and Information Analytics - Presentation at the 9th Indian Chamber of Commerce Banking Summit, Kolkata <br>News and Press Release<br>Dated:- 22-5-2017<br><BR>A Call for Enterprise in Economic Data Generation and Information Analytics ============= Document 1 A Call for Enterprise in Economic Data Generation and Information Analytics. 19th May 2017 Dr. Viral V Acharya Deputy Governor, Reserve Bank of India Peyret RESERVE BANK OF INDIA Presentation at the 9th Indian Chamber of Commerce Banking Summit, Kolkata State of Economic Research on India A vibrant network is slowly but steadily emerging University and business school professors ➤ Analysts at banks, non-bank finance c....
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....ompanies (NBFCs), rating agencies, among others. ➤ Researchers at policy institutions and think tanks Probing inquiries and fact discovery by media ➤ Seminars, conferences, forums, panels, deputations. ➤ Global interest in studying India is surging ➤ More undergraduate and post-graduate (MS, PhD) students interested in pursuing Economics and Finance! Miles to go before we sleep….. on a good, firm trajectory 2 How Do We Accelerate? The situation seems ripe for Enterprise in Economic Data Generation and Information Analytics 3 A HUGE opportunity! ➤ Alongside banks and other financial intermediaries, need a parallel ecosystem of economic and financial data and information services that ➤ C....
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....ollects, collates and generates new data points on the economy and financial markets ➤ Disseminates publicly or sells the data ➤ Analyzes, aggregates and researches data to provide information analytics ➤ Creates information-based business opportunities. ➤ Aids analysis-driven policy-making and thinking Given our core human resource strength in computing and information systems, this is a low- hanging fruit that has not yet been plucked 4 Examples Real-time inflation and consumption metrics: ➤ E-commerce sites What are the sustained temporal and geographic variations in prices and quantities? Employment statistics: Payments data; bank and NBFC KYC data Can Big Data help us compute quarterly unemplo....
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....yment rate? Rural and informal economy: NBFC and Micro-finance institutions; FMCG companies Do omissions of rural and informal economy in formal statistics mask economically relevant growth and inflation outcomes? State finances: Implied credit rating/risk using RBI State Finances report What is the implied subsidy in borrowing costs? LO Examples Hot money flows: Corporate bond, commercial paper, External commercial borrowings, Masala bonds - FPI investments (maturity/location) Which of the flows are "carry trades" and which are long-term? Governance and corporate finance of pyramids and group companies: ➤ Consolidate individual company/subsidiary filings ➤ Are internal transfers tunneling or internal capital ....
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.... markets in response to credit constraints? ➤ Are foreign transactions round-tripping / tax-arbitrage or genuine investments? Bank lending boom and bust cycles: ➤ Let me elaborate on this as a leading example with one of my ongoing research studies and how it could be done better 6 The Anatomy of a Business Cycle Presentation at The 2nd Moody's, ICRA and NYU Stern Conference: August 3rd, 2016 Viral Acharya Prachi Mishra N. R. Prabhala CAFRAL, Univ of Maryland New York University RBI NYU STERN à¤à¤¾à¤°à¤¤à¥€à¤¯ Pegref RESERVE OF INDIA BANK UNIVERSITY OF MARYLAND ROBERT H. SMITH SCHOOL OF BUSINESS Qualifier Views are personal. Not necessarily the official viewpoint of RBI 8 Context....
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.... We analyze the anatomy of India's economic and financial cycle since 2008 - Cycle is big Cycle is rather sharp • Understanding and disentangling the channels - Bank lending channel · ◠• Supply of credit too low? State-owned (distressed) banks - Corporate distress channel Demand for credit too low? 9 Overview: India's economic and financial cycle Investment Pick up in investment after GFC ➤ Slowdown starting 2011-12 Similar cycle for other real outcomes Similar cycle for bank credit ➤ Credit and real cycles highly correlated 10 Real and Credit outcomes 11 Firm Sales and Employment Growth (Annual average, in %) Sales growth -Employment growth 18 16 14 24 225 25 Capital Expe....
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....nditures (Firm-level, average, in %) 23 12 10 22 21 20 80 19 60 18 4 17 2 16 0 15 2008 2009 2010 2011 2012 2013 2014 -2 2008 2009 2010 2011 2012 2013 Notes. Capital expenditures (t) = (Net fixed assets (t+1) -Net fixed assets (t) + Depreciation)/Net fixed assets 12 23 235 25 Growth in Credit: By Bank Ownership (Annual, in %) State-owned Private 21 19 17 15 13 11 9 7 5 2008 2009 2010 2011 2012 2013 13 6.5 6.0 5.5 5.0 4.5 4.0 % of Gross Advances -Restructured Assets % Stressed Assets of Banks →Gross NPA % (RHS) 8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5 4.0 3.5 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 ....
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.... Mar-16 14 3.0 10 5 Credit and Investment Cycle 10 00 8 60 0 2008 2009 2010 2011 2012 2013 4 -5 -10 -15 2 0 -2 -4 -20 -6 -credit growth (annual, in %) -investment (right scale, in mn of Rs) 15 Can we disentangle the bank lending (supply) channel from the corporate demand (demand) channel? Should policy resolve bank stress or corporate stress or both? 16 Empirical strategy: Diff-in-diff Do weak firms, and firms connected to weak banks, respond differently from healthier firms, connected to the same banks, when the cycle turned? - - Weak and strong firms. – Firms connected to weak or strong banks - Use variation pre and post 2012 when cycle turned to distinguish bank lending channel from c....
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....orporate channel 17 Data Firm-level real and financial outcomes CMIE Prowess 3,000 listed companies Real outcomes Sales, employment, capx Financial outcomes ICR, assets, leverage Bank-level data • BSR 2, Reserve Bank of India 18 Data (contd.) Weak firm - Interest Coverage Ratio (ICR)<BR> News - Press release - PIB....