Brexit:Britain’s time to be or not to be?

A referendum is being held on Thursday, 23 June to decide whether Britain should leave or remain in the European Union. This article is designed to be an easy-to-understand guide – and a chance to ask other questions, a selection of which we’ll be answering at the bottom of the page.

What is a referendum?

A referendum is basically a vote in which everyone (or nearly everyone) of voting age can take part, normally giving a “Yes” or “No” answer to a question. Whichever side gets more than half of all votes cast is considered to have won.

Why is a referendum being held?

1604976Prime Minister David Cameron promised to hold one if he won the 2015 general election, in response to growing calls from his own Conservative MPs and the UK Independence Party (UKIP), who argued that Britain had not had a say since 1975, when it voted to stay inthe EU in a referendum.The EU has changed a lot since then, gaining more control over our daily lives, they argued. Mr Cameron said: “It is time for the British people to have their say. It is time to settle this European question in British politics.”

What is ‘Brexit’?

Brexit is an abbreviation of “British exit” that mirrors the term Grexit. It refers to the possibility that Britain will withdraw from the European Union. The country will hold an in-out referendum on its EU membership on June 23.

When is the EU referendum? 

The in/out referendum on Britain’s membership of the EU will take place on Thursday June 23.

Prime Minsister David Cameron announced the date after he secured a deal with other European leaders at a crunch summit in February.

The Government decided to hold the vote before the start of the summer migration crisis, which could stir up more Eurosceptic feeling among the British public.

Economic views on Brexit?

Supporters of #Brexit argue that EU countries have every incentive keep trading with the UK, which is a large importer of goods and services.

But there is uncertainty over what would happen if the UK leaves the EU and needs to develop new trade agreements with the rest of the world.

Europhiles are concerned that foreign companies would be less likely to invest here and could move their headquarters elsewhere if Britain loses access to the single market.

Investor Neil Woodford, the founder of Woodford Investment Management, described pro-European claims that the economy would be damaged as “bohus”.

Mr Woodford said: “I think it’s a nil-sum game frankly, whether we stay or whether we leave.”

If #Britain leaves the EU, it will no longer have to contribute billions of pounds a year towards the #EuropeanUnion’s budget.

In March Brexit campaigners slammed a Confederation of British Industry (CBI) report that claimed that leaving the EU would cause a £100billion “shock” to the UK economy.

The Treasury has been accused of “doom and gloom” after predicting that a Brexit would cost households £4,300 a year by 3030, leaving Britain worse off for decades.

Who will be able to vote?

British, Irish and Commonwealth citizens who live in the UK, along with Britons who have lived abroad for less than 15 years, will be able to vote on June 23.

As with other elections in Britain, only people aged 18 and over will be allowed to cast their vote in the nationwide referendum.

But unlike the general election, members of the House of Lords and Commonwealth citizens in Gibraltar will also be eligible to vote.

What happens if the U.K. leaves the E.U.?

Advocates of Brexit say that being outside the E.U. would boost the British economy by placing fewer regulations on consumers, employers and the environment. It also would give the country more freedom to establish its own economic and political policies.

The E.U. is the largest British trade partner, and those who oppose Brexit argue it would result in higher costs for goods and services. The departure from the E.U. would mean Britain could no longer benefit from being part of a single economic market and the trade benefits it brings, an argument that deputy national security adviser Ben Rhodes made to reporters last week.

“We believe that the U.K. has benefited from the single market,” he said. “That is good for the British economy and that, in turn, is good for the United States economy, because we benefit from that relationship with both the U.K., but also the European Union broadly.”

Many Brexit campaigners also say leaving will lower immigration, a priority for some, because the U.K. will no longer be bound by E.U. policies and could tighten its laws.

Seven leaders have warned of the risk to global economy if Britain votes to leave the European Union in a referendum next month.

The UK leaving the European Union would “reverse the trend towards greater global trade and investment, and the jobs they create, and is a further serious risk to growth,” leaders said in a joint declaration at the G7 meeting in Japan.

The warning was listed together with concerns about terrorism, the refugee crisis and geopolitical conflicts as a potential threat of a “non-economic origin”.

Prime Minister David Cameron’s campaign has focused on the danger to growth and jobs of choosing to leave the 28-nation bloc in the 23 June vote.

Angela Merkel, the German Chancellor said the EU Referendum was not a major topic of discussion at the summit but there was a consensus that leaders wanted the UK to stay in.

“It was no subject here. But there was the signal that all who sat here want Britain to stay part of the EU,” she said.

“But the decision is up to the British voters,” she added.

The G7 statement follows comments from Bank of England Governor Mark Carney that the event could cause a sharp collapse in the value of the pound.

IMF’s managing director Christine Lagarde warned the effect of Brexit on the British economy ranged from “pretty bad to very,very bad”.

Speaking to the press at the conclusion of the G7 talks on Friday, David Cameron said the UK should “listen to our friends” on the issue of EU membership.

“The question is not: are we a great country? The question is how do we do best. And it is not just me saying that there are economic risks from Britain leaving the EU – it is now a pretty large consensus that includes people of impeccable independence and academic standing,” David Cameron said.

But some voters have recently blamed UK politicians for not knowing how to vote.

A member of the audience participating in the first major debate on the European Union Referendum blamed “insults” and “deflections” from politicians for not knowing how to cast his vote.

The 21-year-old from the audience said: “I just want to say to you all: here we are again. Once again we’ve got deflections, insults, petty name calling… Do you actually believe your own campaigns?”

Greeted with applause and laughter, he added: “What are we supposed to do? I do not have a problem admitting I have no idea what to and I blame you lot entirely for that.”

 

 

P2P Lending: Spreading from America to Argentina

Finding different sources of investment is picking up as a phenomena across the Globe along with India. With limited venture funds and resource capital available, individuals are being compelled to seek out different avenues of funding such as peer-to-peer lending (P2P lending) for their educational, personal, functional purposes.

What is Crowd Funding and Peer to Peer Lending?
Crowd Funding:
CrowdFunding generally refers to a method of funding a project or venture through small amounts of money raised from a large number of people, typically through a portal acting as an intermediary. There are numerous forms of crowd-funding: some are charitable donations that provide intangible benefits but no financial returns; others, such as equity crowd funding would fall within the domain of financial markets.

Man money.
Peer-To-Peer Lending (P2P Lending):
P2P lending ( or P2Pl or P2P financing or P2P borrowing) is a form of crowd-funding used to raise loans which are paid back with interest. It can be defined as the use of an online platform that matches lenders with borrowers in order to provide unsecured loans.
Few points to keep in mind:

  • Interest rate may be set by the platform or by mutual agreement between the borrower and the lender
  • Charges(Fees) are paid to the platform by both the lender as well as the borrower.
  • The basic functions that the web portal carries out are that of a service provider and on a broader perspective include the following:
    * Provide a platform for lenders and borrowers to meet;
    * Basic information about borrowers and lenders;
    * Providing ancillary services for the financial transaction and carrying out operational activities ancillary to financial arrangement.
    * The platform can provide services pertaining to loans for facilitating the lending transactions but does not subsume the role of the borrower or the lender in any of the transactions.

According to the data by Peer to Peer Finance Association (P2PFA), the cumulative lending through P2P worldwide has grown from £2.2 million in 2012 to £4.4 billion in 2015.

P2P Lending- Global Market Size
According to data released by P2PFA, the cumulative lending through P2P platforms globally, at the end of Q4 of 2015, has reached 4.4 billion GBP1. Lending through P2P has grown dramatically from 2.2 million GBP in 2012 to 4.4 billion GBP in 2015.

Untitled

Regulatory Practices
P2P lending is approached differently by regulators in different jurisdictions, treated as banking by some jurisdictions and as an intermediary in some others, while some jurisdictions like Israel and Japan have prohibited it altogether. Across the globe, P2P lending is regulated in FIVE different ways as outlined below:

 

Regulatory Regime Description Countries Currently Using the Regime
Exempt market/ Unregulated through lack of definition In these jurisdictions, either the regulation has classified P2P lending as an exempt market or there is a lack of definition in legislation. However, in some cases, there is regulation designed to protect borrowers and that mainly involves rules already in place to protect the borrower from unfair interest rates, unfair credit provision and false advertising. #China, #Ecuador , #Egypt, #SouthKorea, #Tunisia
Intermediary Regulation This regulates P2P lending platforms as an intermediary. It usually requires registration as an intermediary, and other regulatory requirements depending on the jurisdiction. Generally, there are regulations that establish the prerequisites for the platforms to register in order to access the market. Other rules and requirements determine how the platform should conduct its business (for example, the licensing needed to provide credit and/or financial services). #Australia, #Argentina, #Canada (#Ontario), #NewZealand, #UnitedKingdom
Banking Regulation This regulates P2P lending platforms as banks due to their credit intermediation functions and is therefore regulated as banks. As such, the platforms must obtain a banking licence; fulfil disclosure requirements and other such regulations. #France, #Germany, #Italy
US Model There are two levels of regulation, Federal regulation through the Securities and Exchange Commission (SEC) and State level, where platforms have to apply on a state-by-state basis. One level below the federal requirements is state regulation. Some states outright ban the practice of P2P lending (e.g. Texas). Other states place limits on the type of investors using the platforms to lend (e.g. California). In addition, if a platform wishes to operate across multiple state boundaries, it must apply to each state separately. #UnitedState ofAmerica                (#USA)
Prohibited P2P lending is banned under legislation. #Israel, #Japan

US Comapnies in P2PL:
Many online lending companies have launched in the United States, but only two are purely peer to peer. Only two connect everyday investors to borrowers: Lending Club and Prosper. Additional platforms will launch in the future, but for now these are the sole two

KIVA,Lend Academy,StreetShares, ApplePieCapital,Orchard,P2PLending expert,Lending Memo,Crowd fund Insider, Funding Circle, PeerCube, PeerTrader, BlueVestment, nsrinvestment, LendingRobot, Peer Lending Server, Interest RadarLending Club , Prosper Funding,Lending Alpha.

Source:rbi

 

BRICS GDP: Crisis of Confidence?

BRICS GDP in 2016 is nearing a crisis of Confidence from the earlier heydays of 2012 with #Brazil #Russia #India #China #SouthAfrica showing signs of tiredness

Gross Domestic Product (GDP) is the broadest quantitative measure of a nation’s total economic activity. More specifically, GDP represents the monetary of all goods and services produced within a nation’s geographic borders over a specified period of time.

The Equation used to calculate GDP is as follows:

GDP= Consumption+Government Expenditures+Investments+Exports-Imports

Why it’s Important

When GDP declines for two consecutive quarters or more, by definition the economy is in a recession. Meanwhile, when GDP grows too quickly and fears of inflation arise, the Reserve Bank often attempts to stimulate the economy by raising interest rates.

Binoculars.

Global Growth & Forecast

Global growth, currently estimated at 3.1 % in 2015, is projected at 3.4 percent in 2016 and 3.6 percent in 2017. The pickup in global activity is projected to be more gradual than October 2015 as per  World Economic Outlook (WEO), especially in emerging market and developing economies.

Risks to the global outlook remain tilted to the downside and relate to ongoing adjustments in the global economy: a generalized slowdown in emerging market economies, China’s rebalancing, lower commodity prices, and the gradual exit from extraordinarily accommodative monetary conditions in the United States. If these key challenges are not successfully managed, global growth could be derailed.

 

BRICS NATION’S GDP

BRAZIL: There is a phenomenal increase in the size of GDP over past decade in Brazilian economy from $ 892 bn in 2005 to $ 2.39 tn in 2013 with service sector output @70% in 2013. This concludes that Brazilian economy is driven by the service sector.

RUSSIA: Based on data from World Bank it can be easily said that Russian economy is service sector driven economy as the service sector shares 59.78 % of GDP which is 5% increase when compared  to output from 2005 while other sectors like Agriculture and Manufacturing decreased by approxmatly 20%. The size of the economy also decreased by 79% when compared to 2005. Total size of GDP at $ 1.34 tn in 2013.

INDIA: As we all know that India is a developing economy, it was once an Agricultural economy where Agricultural sector was a major contributor to GDP. Now as the world became a global market, India too started contributing to it with new found strength in service sector. It soon became a service economy with contributing 51% of GDP in the year 2013. However, there is an increase in 123% in GDP size while a decrease in growth rate by 26% when compared to 2005 growth rate.

CHINA: Chinese economy is a faster-growing economy with most of its strength in Manufacturing and service sector contributing 31% and 47% of GDP respectively. Its GDP size increased  by 3 times over the past decade. However, like Indian economic growth rate, Chinese economy also decreased from 11.35% in 2005 to 7.68 in 2013 total decrease of 32%.

BRICS REACH 30 PERCENT OF GLOBAL GDP

The share of BRICS countries in global GDP has reached 30 percent as per Russian Minister of Economic Development- Alexei Ulyukayev, who said at the Meeting of the BRICS Trade Ministers in Moscow. Trade between the BRICS countries in 2014 was up more than 70 percent to USD 291 billion, he pointed out.

Our countries accounted for over 17 percent of global trade, 13 percent of the global services market and 45 percent of the world’s Agricultural output in 2014 “Mr Ulyukayev noted, adding that the combined GDP of the BRICS countries surged from USD 10 trillion in 2001 to USD 32.5 trillion in 2014.

gdpgr

 

GDP ANNUAL GROWTH RATE(%) FROM 2005-2014
COUNTRIES 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
BRAZIL 3.1 4 6 5 -0.2 7.6 3.9 1.8 2.7 0.1
CHINA 11.4 12.7 14.2 9.6 9.2 10.6 9.5 7.8 7.7 7.4
INDIA 9.3 9.3 9.8 3.9 8.5 10.3 6.6 5.1 6.9 7.4
RUSSIA 6.4 8.5 8.2 5.2 -7.8 4.5 4.3 3.4 1.3 0.6
SOUTH AFRICA 5.3 5.6 5.4 3.2 -1.5 3 3.2 2.2 2.2 1.5

Source:worldbank data