Gurbachan Singh
Indian Statistical Institute, Delhi
Abstract:
India has large twin deficits, high prices of some real assets, and (less talked about) fragile financial interdependence between banks and the government. These are all ingredients of systemic risk. However, India so far has had a reasonably good record of avoiding financial crises. This is due to five mitigating factors: (a) financial repression in banks, (b) unanticipated jumps in the inflation rate, (c) somewhat regular bailouts, (d) misplaced confidence, and (e) good GDP growth. The first three factors have persistent and arguably high costs. The fourth factor is not a reliable “hedge” against systemic risk. Finally, growth can camouflage the problem, but is not a structural solution. The paper suggests the need to reduce vulnerabilities and the role of costly or unreliable mitigating factors. It suggests a set of consistent and far reaching policies that are long-term in nature.
Date: June 5, 2013
Time: 03:30 P.M.
Venue:
NCAER Conference Room
National Council of Applied Economic Research
Parisila Bhawan, 11, Indraprastha Estate
New Delhi-110002(INDIA)
Location:
View Larger Map
Indian Statistical Institute, Delhi
Abstract:
India has large twin deficits, high prices of some real assets, and (less talked about) fragile financial interdependence between banks and the government. These are all ingredients of systemic risk. However, India so far has had a reasonably good record of avoiding financial crises. This is due to five mitigating factors: (a) financial repression in banks, (b) unanticipated jumps in the inflation rate, (c) somewhat regular bailouts, (d) misplaced confidence, and (e) good GDP growth. The first three factors have persistent and arguably high costs. The fourth factor is not a reliable “hedge” against systemic risk. Finally, growth can camouflage the problem, but is not a structural solution. The paper suggests the need to reduce vulnerabilities and the role of costly or unreliable mitigating factors. It suggests a set of consistent and far reaching policies that are long-term in nature.
Date: June 5, 2013
Time: 03:30 P.M.
Venue:
NCAER Conference Room
National Council of Applied Economic Research
Parisila Bhawan, 11, Indraprastha Estate
New Delhi-110002(INDIA)
Location:
View Larger Map
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