What is Taylor rule?

The Taylor rule was first proposed by economist John B. Taylor in 1993 to provide guidance to the U.S. Federal Reserve* and other central banks for setting short-term interest rates based on economic conditions. John Taylor proposes how Central Banks should alter interest rates in response to changes in economic conditions mainly inflation and economic…

RBI’s disclaimer note on merger of Lakshmi Vilas Bank (LVB) and Indiabulls Housing Finance Limited (IBHFL)

Reserve Bank of India (RBI) in its press release announced that it has learnt merger of Lakshmi Vilas Bank (LVB) and Indiabulls Housing Finance Limited (IBHFL)through media. As per media news above entities have made a merger announcement on April 5, 2019 with approval of their respective Boards. RBI’s disclaimer said that a section of…

What is HTM/ held to maturity?

The entire investment portfolio of the banks (including SLR securities and non-SLR securities) are  classified under three categories viz. ‘Held to Maturity’, ‘Available for Sale’ and ‘Held for Trading’. Held-to-maturity securities are debt security investments which the holder has the intention and ability to hold them until specific date of maturity. The investments classified under…

What is easy money?

Easy money is known as cheap money, easy monetary policy and expansionary monetary policy. An easy money policy is a monetary policy that increases the money supply usually by lowering interest rates. The main purpose of Easy Money policy is to facilitate increase in investment thereby raising gross domestic product. Easy Money occurs when a…