iClub Daily Current Affairs : 25 April 2019

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Film awards to be announced after election

Topic : GS Paper-1 Indian Heritage and Culture

Winners of the 66th national film awards will be declared this year after the conclusion of the general election.

More in news:

• The Information and Broadcasting Ministry said in a release on Wednesday that “since the model code of conduct is in force, which facilitates level playing field to all political parties and the candidates and inter alia seeks to ensure that the power of media is not used in such a manner which affects the general conduct and level playing field during the election process, it has been decided to declare the awards after the election process is over and the MCC concludes.”

• Every year the winners of the awards are announced in the month of April and the presentation ceremony is held on the designated date, May 3. Unlike this year, during the last general elections, the 61st national film awards were announced as per schedule, on April 16, 2014 and were presented on May 3, 2014.

• Meanwhile, sources in the Ministry suggest that no decision on the winners has been taken, even deliberations have not yet been done, for feature film awards.

National Film Awards:

• The National Film Awards is the most prominent film award ceremonies in India.

• Established in 1954, it has been administered, along with the International Film Festival of India and the Indian Panorama, by the Indian government’s Directorate of Film Festivals since 1973.

• Every year, a national panel appointed by the government selects the winning entry, and the award ceremony is held in New Delhi, where the President of India presents the awards.

• This is followed by the inauguration of the National Film Festival, where the award-winning films are screened for the public. Declared for films produced in the previous year across the country, they hold the distinction of awarding merit to the best of Indian cinema overall, as well as presenting awards for the best films in each region and language of the country.

• Due to the national scale of the National Film Awards, it is considered the Indian equivalent of the American Academy Awards.

Pak.-based terrorists had role in cross-LoC trade

Topic : GS Paper-2 International relations

Ten Pakistan-based terrorists have been found involved in funnelling illegal weapons, narcotics and fake currency into the Valley after the government suspended cross-Line of Control (LoC) trade between Jammu and Kashmir and Pakistan-occupied Kashmir (PoK) from April 19, government sources said.

More in news:

• The Ministry of Home Affairs had cited misuse by militants as the reason for shutting down the trade.The sources said investigations had shown that the 10 from J&K had crossed over to Pakistan and joined terror groups. They were found to be engaged in the trade.

• Firms under the control of these militants were doing LoC trade with Indian trading firms operated by their own relatives on the Indian side. The channel of LoC trade, meant to facilitate exchange of goods of common use between local populations, was being exploited to fund illegal and anti-national activities in Jammu & Kashmir.

Background:

• This trade, which was carried out four days a week, is meant to facilitate exchange of regular consumer goods across the LoC in Jammu and Kashmir through trade facilitation centres at Salamabad, Uri, Baramulla and Chakkan-da-Bagh in Poonch, has been halted.

• LoC trade was intended as a confidence-building measure for the population living in remote areas of Jammu & Kashmir and living across the LoC in PoK (Pakistan-occupied Kashmir).

• However, third parties manipulated the trade and misused it for trading goods being produced outside J&K. For example, almonds produced in California found their way in LoC trade and it involved a large transport network spread in many countries.

Army to build tunnels to store ammunition

Topic : GS Paper-3 Security

Indian Army is planning to construct underground tunnels for storage of ammunition along the border with China and Pakistan and Public Sector Undertaking NHPC Limited is being roped in for the purpose.

More in news:

• Underground storage offers improved safety, easier camouflage from enemy observation and satellite imagery and protection from enemy strikes like those seen during the aerial engagement on February 27, a day after the Balakot air strike when Pakistan Air Force jets targeted Indian army installations along the Line of Control (LoC).

• Major armies, including China and the U.S., already use underground ammunition storage, a second source observed.

• These tunnels will be built in high altitude areas in the Northern and Eastern borders. Initially, four pilot projects would be taken up at four different locations along the Northern border and in Jammu and Kashmir at a cost of ₹15 crore, the source said. “These are expected to be completed within two years.”

• As the conditions in the caverns are controlled, it ensures better safety of sensitive ammunition minimising accidental explosions.

Libor transition opens up avenues for IT majors

Topic : GS Paper-3 Economic Development

The London Interbank Offered Rate (Libor) transition opens up a sizeable business opportunity for large consulting firms such as PwC, KPMG, EY and Deloitte and also for global IT firms, including leading players in India.

More in news:

• Individual banks, financial institutions and lending houses are expected to spend anything from $50 million to upwards of $100 million a year for the next two years until the migration is completed by the end of 2021. Analysts say IT will be 50% of this opportunity.

• Regulators globally have asked firms to move away from Libor to other alternate, risk-free rates (RFRs). Derivatives, bonds, mortgages, loans, mutual funds, securities, underwriting, deposits, advances, pension funds and contracts, worth $370 trillion, are currently linked to the scam-hit Libor.

• Opportunities around the migration include assessment of current exposure to Libor, design, development and implementation of new products based on new rates, creation of new valuation models, creation of fresh legal documents and policy frameworks. The transition involves a code replacement towards new benchmark rate.

• The Libor marketplace is very large and it comprises of banks and all large lending agencies, including country lending from the World Bank and Asian Development Bank.

• As far as the business opportunities are concerned, all financial products that are currently linked to Libor would be moved to an optimum benchmark. This would require remodeling, predicting tax implications, contractual changes and system infrastructure including processes and controls. The change would also involve designing new products or remodeling existing products.

Another Y2K wave

• For technology companies, Libor transition is like another Y2K wave and it involves creating new systems, processes and platforms to support the entire migration.

• However Libor conversion would provide opportunity in systems integration, compliance, and customization of packaged apps for meeting reporting needs and related consulting in the short term.

• Majority of large banks and trading houses, including Bank of America, Bank of England, Merrill Lynch, JP Morgan Chase, Morgan Stanley and Japanese banks have started working on Libor transition.

• However, Indian banks are yet to start any work towards migration as the regulator is yet to make any announcement in this regard.

Background:

• In 2017 the UK’s Financial Conduct Authority (FCA) announced that after 2021 it would no longer persuade or compel panel banks to submit the rates required to calculate LIBOR.

What Is LIBOR?

• LIBOR is a benchmark interest rate at which major global lend to one another in the international interbank market for short-term loans.

• LIBOR, which stands for London Interbank Offered Rate, serves as a globally accepted key benchmark interest rate that indicates borrowing costs between banks.

• The rate is calculated and published each day by the Intercontinental Exchange (ICE).

Understanding LIBOR

• LIBOR is the average interest rate at which major global banks borrow from one another. It is based on five currencies including the US dollar, the euro, the British pound, the Japanese yen, and the Swiss franc, and serves seven different maturities—overnight/spot next, one week, and one, two, three, six, and 12 months.

• The combination of five currencies and seven maturities leads to a total of 35 different LIBOR rates calculated and reported each business day. The most commonly quoted rate is the three-month U.S. dollar rate, usually referred to as the current LIBOR rate.

• Each day, ICE asks major global banks how much they would charge other banks for short-term loans. The association takes out the highest and lowest figures, then calculates the average from the remaining numbers. This is known as the trimmed average. This rate is posted each morning as the daily rate, so it’s not a static figure. Once the rates for each maturity and currency are calculated and finalized, they are announced/published once a day at around 11:55 am London time by IBA.

• LIBOR is also the basis for consumer loans in countries around the world, so it impacts consumers just as much as it does financial institutions. The interest rates on various credit products such as credit cards, car loans, and adjustable rate mortgages fluctuate based on the interbank rate. This change in rate helps determine the ease of borrowing between banks and consumers.

Why Is LIBOR Being Replaced?

• There is concerns about manipulation of LIBOR. Manipulation included both reporting low rates to make the bank look stronger than it was and reporting false rates to profit on LIBOR-based financial products.

• In June 2012, the CFTC announced that it was levying a large fine against a bank on the LIBOR panel for manipulating LIBOR along with another benchmark rate based on the results of an investigation that had begun in 2008.

• Ultimately, several large institutions that were implicated payed substantial fines, and several senior bank executives, including the CEOs of two large banks, resigned.2 Additional controversy arose when it was revealed that the Federal Reserve Bank of New York had communicated its concerns about LIBOR manipulation to the Bank of England four years earlier, in 2008.

• Concerns about the potential for LIBOR manipulation were amplified by the thinness of the market on which the reference rate was based. For a variety of reasons, including post-crisis credit concerns and downgrades, copious liquidity provided by QE-swollen central bank balance sheets, and regulatory changes, banks have significantly reduced their short-term unsecured borrowing and Schrimpf and Sushko. In 2018, the Federal Reserve Board estimated that only six or seven transactions occurred in the one- and three-month tenors (the most used tenors) at banks on the dollar LIBOR panel, with even fewer transactions at longer tenors.

The implications of LIBOR replacement for financial firms

• The transition from LIBOR will bring considerable costs and risks for financial firms. Since the proposed alternative rates are calculated differently, payments under contracts referencing the new rates will differ from those referencing LIBOR. The transition will change firms’ market risk profiles, requiring changes to risk models, valuation tools, product design and hedging strategies.

The financial, customer and operational impact of replacing LIBOR

• Renegotiating a large volume of contracts would be difficult, especially when one party has a contractual right to a windfall gain. If contracts are left to convert to fall-back provisions if LIBOR becomes unavailable, a vast number of price changes would occur in a short period.

• The associated financial, customer and operational impacts would be difficult to manage.

• Financial firms will also face a serious communication challenge with retail customers. For example, most variable rate mortgage customers in the US may understand that their rate is LIBOR+200 basis points (or similar) but have little understanding of LIBOR itself.

Magic milk: fighting infections with a clue from the echidna

Topic : GS Paper-2 Social Justice/Health

Scientists at the Council of Scientific & Industrial Research – Centre for Cellular and Molecular Biology (CSIR-CCMB) here have isolated an anti-microbial protein found in the milk of an egg-laying mammal.

More in news:

• The protein promises to serve as an alternative to antibiotics used on livestock.

• Echidnas (in pic), also known as spiny anteaters, are unique egg-laying mammals found only in Australia and New Guinea.

• Their young hatch from eggs at a very early stage of development and depend completely on mother’s milk. But the mammary glands of the echidnas are devoid of nipples, forcing the young ones to lick milk from the mother’s body surface and potentially making them vulnerable to micro-organisms.

• However, nature protects its own. The milk of the echidna has a protein that can puncture the cell membranes of multiple bacterial species, thus destroying the source of infection. It can then be used to fight infections.

• The scientist pointed out that there is a rise of superbugs due to the indiscriminate use of antibiotics by the animal husbandry industry to raise livestock.

• The superbugs can cause mastitis, an infection of the mammary gland, in dairy animals.

• The team has been able to show that the protein from echidna milk is effective against mastitis-causing bacteria.

China announces plan to build moon station in 10 years

Topic : GS Paper-3 Science and Technology

China aims to achieve space superpower status and took a major step towards that goal when it became the first nation to land a rover on the far side of the moon in January.

More in news:

• It now plans to build a scientific research station on the moon’s South Pole within the next 10 years, China National Space Administration head Zhang Kejian said during a speech marking “Space Day”, the official Xinhua news agency reported.

• He also added that Beijing plans to launch a Mars probe by 2020 and confirmed that a fourth lunar probe, the Chang’e-5, will be launched by the end of the year.

• Originally scheduled to collect moon samples in the second half of 2017, the Chang’e-5 was delayed after its planned carrier, the powerful Long March 5 Y2 rocket, failed during a separate launch in July 2017.

• China on Wednesday also announced that its Long March-5B rocket will make its maiden flight in the first half of 2020, carrying the core parts of a planned space station. The Tiangong — or “Heavenly Palace” — will go into orbit in 2022, the China Manned Space Engineering Office said.

WHO offers lifestyle advice for children

Topic : GS Paper-2 Health

The United Nations on Wednesday released it’s first-ever recommendations on physical activity for children under five, with disputed advice on subjects ranging from screen time to “tummy time”.

More in news:

• The guidelines from the World Health Organization may read to some parents like common-sense practices, including not exposing babies under 12 months to screens.

Recommendations:

• For infants under one at least 30 minutes of physical activity a day, including prone position — or tummy time — for those not yet mobile.

• Babies under one should also not be restrained in a pram, highchair or strapped to someone’s back for more than an hour at a time and should sleep between 12 and 17 hours a day.

• For children between one and two years old,three hours of physical activity each day, with no more than an hour of “sedentary screen time” and at least 11 hours of sleep.

• And for children aged three to four, three hours of daily physical activity should include at least an hour of “moderate to vigorous” movement, while screen time should be kept under an hour.

NEWS in Brief

 Booth slip

• If a citizen has a Voter ID but her name is not on the electoral roll/voters list, she will not be allowed to cast her vote.

• A voter slip or booth slip is an identification document issued to a citizen before an election, which confirms that her name is on the electoral roll.

• Booth slips are issued by the Election Commission of India and can be downloaded online. However, if a voter is not carrying her booth slip, she need not worry at the polling booth, election officials, who have a list of the voters, also have copies of their booth slips and voters can take their slips from them.

Editorial Sections :

Beyond the free trade idealism – The Hindu

Just recompense – The Hindu

Political careerism is fine but sad – The Hindu

Comedian’s triumph – The Hindu

Taking advantage of BRI – The Hindu

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