Tag Archives: Into

Samsung to focus on new products: Chairman

 SEOUL: South Korea’s Samsung Electronics will this year focus on developing new products and tapping into new businesses to get ahead of competitors amid the global economic slowdown, its chairman said Monday.
Lee Kun-Hee, in a New Year’s speech to employees, said existing businesses would experience a stagnation in growth, and that new start-ups would provide the best opportunities even although they will find it increasingly competitive during the downturn.

“Samsung’s future lies in new businesses, new products and new technologies,” he said, stressing the need for “increasing investment and jobs and focusing on exports.”

Samsung is the world’s largest technology company by revenue and closely competes with Apple in the fast-growing smartphone market.

It is also the world’s leading memory chipmaker and makes a wide range of products.

 watch, samsung, products, focus, chairman, samsung focus, focus products, products chairman, technology samsung, news, please, thenews, send, your, facebook, provide, technology, today, please provide, south, will, this, developing, businesses, paper, city, back, karachi, twitter, world, gallery, apple, email, comments, watch samsung, international, news international, pakistan, korea, south korea, year, 2012, archive, print, issues, back issues, opinion, mobile, rahman, sports, blog, feedback, nato, crisis, like, tweet, google, more, said, australia, talks, japan, report, your comments, comments please, provide your, name, country, today watch, seoul, seoul south, korea samsung, electronics, samsung electronics, electronics will, will this, this year, year focus, focus developing, developing products, tapping, products tapping, into, tapping into, into businesses, ahead, businesses ahead, competitors, ahead competitors, national, weird, entertainment, updated, writers, writers archive, edition, print edition, lahore, karachi lahore, islamabad, youtube, home, home news, world sports, business, sports business, video, video gallery, photo, photo gallery, memogate, attack, nato attack, here, like this, content, this content, content facebook, send facebook, twitter tweet, button, tweet button, send google, plusone, google plusone, view, view more, services, more services, would, that, start, company, smartphone, from, forum, against, watch australia, court, holds, release, japan developing, cyber, developing cyber, weapon, cyber weapon, weapon report, select, select country, guinea, india, israel, lanka, code, problem, click, watch nato, energy, energy crisis, rallies, watch rallies, banned, rallies banned, banned karachi, zones, karachi zones, zones watch, talks watch, contact

Macroprudential policy Risky business

 THE new big hope of central banks is called macroprudential policy. During the boom, central banks used the fairly blunt instrument of interest rates as their main weapon. But since inflationary pressures were low, thanks to the deflationary shock stemming from China and eastern Europe, rates were kept low. This led to a splurge of asset-backed lending. Meanwhile, banks found easy ways to exploit the rules of the Basle accords – designed to ensure the system was well-capitalised. As a result, when mortgage-backed securities started to plunge in value in 2007, the banks were much less robust than was previously thought.

The Bank of England has set up a financial policy committee, which is just starting the arduous task of sorting out which principles it should follow and which policy buttons it can push. In a paper out today, it sets out its options. It starts by discussing the potential flaws in financial markets such as

incentive distortions which can, for example, arise from contracts that reward short-term performance excessively

informational distortions such as those linked to buyers doubting the quality of assets (adverse selection) or less than fully rational processing of information

co-ordination problems, where collective action, for example to step away from lending in a boom, may be in the interests of individual banks but there is no way to co-ordinate on this outcome

As the paper points out (and as Hyman Minsky famously noticed) there is a tendency for banks to get overexposed to risk in the upswing of a credit cycle. After all, it is the banks that are driving the cycle. As they become more confident about lending against assets, more funds are available to investors/speculators and asset prices rise, increasing the confidence of all involved. As a proportion of GDP, commercial lending to real estate doubled between 2002 and 2008. In the UK banking system, leverage (as measured by total assets to shareholders’ claims) increased from 20:1 to 50:1 within a decade. Both measures ought to have caused alarm but nothing was done.

There is little new in this, as the paper recognizes. Credit cycles have nearly always been marked by lending against property. But property is an illiquid market and prices fall very sharply when the balance of supply and demand shifts, often wiping out of all of a bank’s collateral. Meanwhile, the duration of bank funding was steadily falling, from an average maturity of 10 years in the early 1980s to four years by 2008 (the US followed a similar trajectory). This left the banks very vulnerable to a run on liquidity.

The FPC says the authorities have, in principle, three types of measure to deal with these risks.

those that affect the balance sheets of financial institutions

those that affect the terms and conditions of loans and other financial transactions

those that influence market structures

For example, balance sheet measures include maximum leverage ratios and liquidity buffers; the second group includes caps on loan-to-value ratios and minimum margins; the third includes requirements for disclosure to reduce uncertainty about the market exposure of individual banks, but also the use of central counterparties to clear trades.

The paper then conducts an excellent and clear-eyed assessment of the pros and cons of these measures, without coming to any definite conclusion (the paper is part of a consultation process). What is clear is that the authorities cannot rely on just one or two measures, esepcially given the proved willingness of banks to game the system. Of course, the authorities cannot prevent all future financial crises, but they can still be a lot more alert than they were in the early 2000s. The paper shows the FPC is making a good start.

this, comment, that, policy, economist, blog, report, recommend, 2011, from, macroprudential, macroprudential policy, buttonwood, banks, business, topic, doubleclick, lasn, eks2, lasn eks2, subs=n, eks2 subs=n, wsub=n, subs=n wsub=n, sdn=n, wsub=n sdn=n, ord=328282512, view, link, most, this blog, more, reply, risky, risky business, politics, policy risky, permalink, financial, profile, recommend comment, recommend report, report comment, permanent, report permanent, permanent link, link this, this comment, comment permalink, permalink reply, reply view, central, world, with, src=, border=, alt=, what, were, their, href=, width=, height=, border= alt=, 2012, markets, have, they, related, government, blogs, here, href= doubleclick, jump, doubleclick jump, jump lasn, ord=328282512 src=, src= doubleclick, doubleclick lasn, ord=328282512 width=, width= height=, height= border=, financial markets, after, correspondents, finance, which, economics, 20th, 20th 2011, like, comments, sz=125×125, economist blogs, click, click here, when, bank, public, blogs buttonwood, buttonwood 2011, 2011 macroprudential, http, exchange, notebook, than, readers, economy, recommended, topics, over, debt, named, named after, blog correspondents, hope, free, lending, term, most recommended, would, capital, hedge, political, blog named, rates, january, culture, life, twitter, thanks, much, just, banking, been, time, items, sales, name, commented, most commented, central banks, interest, find, europe, follow, today, there, credit, prices, market, balance, problem, into, book, hedgefundguy, columnist, takes, takes name, name from, here find, find more, more href=, britain, americas, science, technology, eastern, game, lexington, work, asset, paper, risk, cycle, about, funds, years, other, clear, then, money, your, cornish, expat, cornish expat, make, alt= click, provide, analysis, blog takes, american, interest rates, site, science technology, latest, free exchange, babbage, america, since, found, system, banks were, those, assets, measures, these, part, merry, fund, mission, failure, mission failure, vote, time vote, link exchange, could, will, around, better, trade, guide, guide hedge, hedge funds, wrote hope, news, british, tree, here href=, used, subscribe, newsletters, help, asia, africa, data, intelligent, world 2012, latest blog, posts, blog posts, americas view, bagehot, banyan, buttonwood notebook, multimedia, charlemagne, schumpeter, print, politics this, week, facebook, inflationary, since inflationary, result, value, such, example, real, leverage, often, liquidity, authorities, risks, without, what clear, clear that,