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Moorad Choudhry

Moorad Choudhry
Professor Moorad Choudhry is at the Department of Mathematical Sciences, Brunel University. He has over 25 years experience in investment banking in the City of London and began his career at the London Stock Exchange in 1989. Choudhry is Honorary Professor at Kent University Business School, Fellow of the Chartered Institute of Securities & Investment and a Fellow of the ifs-School of Finance. He is Managing Editor of the International Journal of Monetary Economics and Finance and author of The Principles of Banking (John Wiley 2012).

Recent blog posts

  • You read it here first: an Uber-Dove at the helm means markets are only going up
    Forecasting is a mug’s game at the best of times, so one’s success in this field should be treated in the same way as one’s failures: with a wry smile. And this week’s headline in The Times – [US Fed] Rates pledge pushes the S&P to a record high – raised just such a smile!
  • Banks: start worrying when Google offers a current account and overdraft (but not before…)
    On a trip to Budapest last month I caught the BA in-flight magazine Business Life, and one article in particular stood out. The title shouted in large font “Who Needs Banks? The rise of crowdfunding”. The article went on to describe the growth in direct lending such as P2P and crowdfunding, saying how lack of supply was causing more and more small businesses to turn to this disintermediated form of finance.
  • Forward guidance: making it up as you go along
    I have a suggestion for the BoE. Just say nothing at all about the next move in the base rate. At least you won’t give the impression that you’re making it up as you go along.
  • The bank bonus system is 200% no longer fit-for-purpose
    Who would want to wear a fake Rolex or Cartier watch? I mean, it’s only you that you’re kidding, right? And what’s the point of lying to oneself? Once you start doing that, you may as well give up the ghost.
  • Piling on household debt also causes crashes
    Six years after Lehmans, the mainstream view remains that it was banks that caused the crash. It is simplistic to think that this was the only, or even the main, cause of the economic meltdown.
  • Everyone wants a piece of the (banking) action
    If banking is such a tough and competitive environment post-crash, with over-capacity, ever-increasing costs of regulation, and everyone generally despising bankers, why is it that sophisticated investors are scrambling over themselves to buy banks right now? It’s an intriguing one isn’t it?
  • Consultant-speak and fake office culture is ruining banks' operating effectiveness
    Consultants are taking over the world, and while this is good for them and their bottom line, it isn’t good for team satisfaction or indeed corporate effectiveness. What I'm referring to is the gradual and insidious influence of consultant-speak: saying 100 words where 10 will do, and generally making transparency and clarity the enemy of their objectives.
  • Central banks and QE again: be afraid
    Just as I feared I was beginning to sound like a stuck record blathering on about central banks and what their role should be, I noted the consistently excellent “Buttonwood” column in The Economist this week suggesting that central banks will be financing governments on a permanent basis.
  • The Western capitalist system is becoming not fit for purpose
    How many times have we heard that the bank bonus system is needed in order for banks to attract “the best”, that pay levels are where they are because of the need to retain the best people? If the best could manage the debacle of 2008, I’d hate to see what a team of mediocre executives could do.
  • The changing role of central banking – we should we worry about it
    The world’s oldest central banks are almost – but not quite – as old as modern commerce.
  • FOMC and optimism: an uber-dove at the helm means markets are only going up in 2014
    Last week, a senior monetary policy committee member at the Bank of England remarked that when interest rates do start to rise it’s good news, because it means that the economy is growing at a pace that warrants action to reign it in, so to speak. That is 100% right.
  • Ukraine geo-politics illustrates continuing emerging market fragility
    Although the crash of 2008-09 didn’t result in any emerging economy bank crashes, not newsworthy ones anyway, it still put a dent in developing country growth rates. Understandably of course, globalization has made economies interlinked and there is the old adage, still true, that when the US sneezes the rest of the world catches a cold. So what does market reaction to the Ukraine situation tell us?
  • P2P lending will finish banks! Yeah, right…
    Just recently I’ve read some good things about peer-to-peer (P2P) lending: how it’s growing fast; how it offers a superior product and better interest rates to both savers and lenders; how its use of the internet gives it a march on the technology stakes compared to banks; and how it simply is wonderful simply by dint of not being offered by banks.
  • Talking up a crash
    Is it possible for the business media to turn ordinary market volatility into a negative correction or even a crash?
  • Forward Guidance Mark II: further stretching logic
    Forecasting the future is an undertaking fraught with risk, mainly because it is difficult, if not impossible, to do with any degree of accuracy or consistency. Astrologers and palm readers are familiar with this problem in their daily line of work.
  • Basel III liquidity rules: it’s a matter of culture
    As everyone by now knows, the real significant difference between Basels I and II and Basel III isn't the capital stuff, it’s the liquidity requirements. The first two regimes didn't address liquidity (one may think that’s odd, but the theoretical reason was that banks perceived as funding-weak would be shunned by customers as a home for their deposits – a market-based solution, if you like...) By contrast, Basel III is chock full of text on the subject. Of course everything is relative.
  • Beware Bitcoin: it isn’t a “currency”
    The US Federal Reserve is an august institution. It is respected the world over as the ultimate guardian of the global economy, if only because of its role as the custodian of the US dollar, the world’s de facto reserve currency. So what on earth it is doing going anywhere near Bitcoin?

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