Futures shock: Shanghai shows how not to trade derivatives

Article Abstract:

Beijing stepped in to bail out Shanghai International Securities on Feb 23, 1995 when the firm apparently tried to protect its losing short position by manipulating the market. China's bond-trading market has since been changed and perhaps improved to lower once-generous limits that encouraged reckless risk-taking. Bond futures have risen dramatically since Oct 1994 when the government added an inflation-linked premium to its bonds. They may stabilize now, following a closure of the markets while the details were sorted out.

Commercial Banks, Securities Brokerage, Intnl Banking Services, International Trade Financing, Stockbrokers, Cover Story, Derivatives (Financial instruments), Securities industry, International banking, Shanghai International Securities Company Ltd.

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Creative accounting

Article Abstract:

A dispute over $604 million between the Philippines National Bank and the national Treasury threatens the bank's solvency and credibility, and possibly the country's stock exchange. The bank, half-owned by the govt, says the Treasury owes it $1.1 billion in reimbursements and interest for liabilities the bank has transferred to the Treasury but paid for on its own. The Treasury says the debt is only $452 million. The difference could sink the bank, which accounts for 5% of the bourse's capitalization.

Commercial Banking, State commercial banks, State Banks, Philippines, Philippines National Bank

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Slowdown in lending

Article Abstract:

Indonesia's government is preparing to reorganize the country's seven state-controlled banks, while the private banking sector is planning to end a two-year effort at consolidation by increasing loans. However, a May 1993 World Bank report warned about the rising number of non-performing loans. Further consolidation and care in lending may therefore be required, a need addressed to some extent through higher capital reserves among the private sector banks.

Indonesia

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