This study attempts to investigate the Youth Not in Education, Employment and Training (NEET) in Sri Lanka. The objectives of this study include identifying the share of youth NEET in Sri Lanka as a percentage of population with regards to national, sectoral, gender, education, ethnicity and marital status, and to identify the determinants of those who are NEET. This study is based on cross-sectional data obtained from Sri Lanka Labour Force Survey (SLFS) 2015. The methodology adopted for the study consists of two major components. First component attempts to generate youth NEET estimates for Sri Lanka using descriptive statistics tools. The second component of the methodology includes a logistic regression analysis to identify the determinants of youth NEET. The study found that Sri Lanka has a significantly high youth NEET rate of 25.8 percent in 2015, which is unsatisfactory to the Sri Lankan labour market. This raises the labour market vulnerability with regards to youth population of Sri Lanka. The research also found the significant NEET disparities among youths by sector, gender, age, education, ethnicity and marital status. Moreover, the logistic regression analysis identified age, gender, education, residential sector and marital status as the significant determinants of youth NEET in Sri Lanka.

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A credit default swap (CDS) is a derivative financial instrument that provides insurance against credit risk. CDSs on subprime Asset Backed Securities (ABSs) paved the way for securitizers to hedge the credit risk of the underlying subprime loans during the onset of the Global Financial Crisis (GFC). Thus, mortgage originators were least concerned about the quality of loans they securitize since they could hedge the default risk via CDS, paving way to a moral hazard concern. We argue that the core issue pertaining to CDSs, moral hazards, remains unattended even after a decade since the GFC. This paper, utilizing a lexonomic approach embedded in the second-best efficiency criteria, examines the mechanism behind a CDS and develops a regulatory framework with the view of minimizing moral hazards associated with CDSs. Our analysis indicates that incorporating an ‘excess’ on CDSs may minimize moral hazards, since originators are compelled to bear part of the risk associated with assets they create.

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