Swatantra

Lehman Brothers’ stock was selling at $86 a share in February 2007, giving the company a market capitalisation of nearly $60 billion. For the year, the company reported a new record high in net income, over $4 billion. In January 2008, Lehman Brothers was the fourth-largest investment bank in the U.S. In March, immediately after Bear Stearns (the second largest holder of mortgage backed securities, right after Lehman Brothers) almost collapsed, Lehman stock dropped by almost 50%. In June, the company reported a quarterly loss of $2.8 billion, its first quarterly loss since being spun off from American Express way back in 1994. By the end of 2008, Lehman Brothers Holdings Inc. had vanished from the investment banking landscape, the largest corporate bankruptcy filing (with $619  billion  in debt) in U.S. history.   The Beginnings of Lehman Brothers            Source: HBS Lehman Brothers was founded in t...

Deutsche Bank, where do we begin? Once upon a time, it was seen as one of Europe’s strongest bank. But the German bank has been plagued by a series of contravertial issues. If we take a look at the bank’s stock price over time, we can observe that after recovering from the financial crisis in 2008, the company lost almost 75% of its market value. And today we will explore some of the reasons for that decline.         Source: The New York Times Deutsche has paid   18 billion dollars in fines this decade, with more than 10 billion dollars occurring in the last five years. In 2015, it was fined 2.5 billion dollars by US and UK regulators for its role in rigging the Libor scandal. Moreover, in that same year, it was further fined 258 million dollars for violating US sanctions against Iran and Syria. In 2008, Deutsche was among the leaders in mortgage backed securities. Not only was it selling toxic investments but it was also betting against the produ...

CBDC is short for Central Bank Digital Currency. It's an electronic form of central bank money that citizens can use to make digital payments or deposit. A CBDC is a digital currency, it's issued by a central bank, and is universally accessible.                Source:Forbes What is a Central digital currency (CBDC)? Central bank digital currencies (CBDCs) have recently emerged as a hot topic in the financial space. Banks, Institutions, and governments are performing research and analysis on the economic and technical feasibility of introducing a new form of digital money and its impact on monetary and fiscal policy. A Bank of International Settlements report states that over 80% of central banks are already researching CBDC. It begs the question: why are these institutions preoccupied with CBDCs?  CBDCs explained Cryptocurrencies, as we know them today, are extremely volatile and lack government backing. CBDCs overcome these ...

Introduction China pledged to preserve much of what makes Hong Kong unique when the former British colony was handed over more than two decades ago. Beijing said it would give Hong Kong fifty years to keep its capitalist system and enjoy many freedoms not found in mainland Chinese cities.  But it seems that these promises are fading. In recent years, Beijing has taken what critics say are brazen steps to encroach on Hong Kong’s political system and crack down on dissent. These moves sparked massive protests in Hong Kong and have drawn international condemnation. In 2020, Beijing passed a controversial national security law and arrested dozens of pro-democracy activists and lawmakers, dimming hopes that Hong Kong will ever become a full-fledged democracy. Is Hong Kong part of China?  Hong Kong is a special administrative region of the People’s Republic of China that has been largely free to manage its own affairs based on “one country ,  two systems,” a nationa...

A pyramid scheme is a fraudulent business practice that involves the building of a network, or “pyramid,” of investors who pay money into the scheme with the hope of earning a high return on their investment. Hierarchical in structure, a pyramid scheme has a single individual or entity at the top of the pyramid, underneath which is an expanding base of investors. An investor pays to participate in the scheme and then recruits other investors to join the pyramid, who subsequently pay money to the investor who recruited them. Pyramid schemes rarely provide an actual product and rely solely on the willingness of recruits to invest money into the scheme. Pyramid schemes are considered a form of business fraud in most countries and are therefore illegal. In most pyramid schemes, the person who originates the scheme sends a letter or other form of communication to a number of individuals. The letter typically describes a business opportunity that promises a high financial reward in a short t...

The term "money laundering" originated from the Mafia group in the United States of America. Mafia groups have made huge amounts of extortion, gambling, etc. and this money is shown as legal money. In India, "money laundering" is popularly known as Hawala transactions. Meaning of Money Laundering: Money Laundering refers to converting illegally earned money into legitimate money. So Money Laundering is a way to hide the illegally acquired money. In the method of money laundering; money is invested in such a way that even the investigating agencies can’t trace the main source of wealth.  The person who manipulates this money is called "launderer". So the black money invested into capital markets or other ventures returns back to the real money holder as the legitimate money. Steps involved in Process of Money Laundering: 1.  Placement 2 . Layering 3.  Integration 1. Placement:  The first step in this process is the investment of black money in t...