Viral Acharya
Deputy Governor, Reserve Bank of India.
Abstract:
Launched in Summer 2012, the European Central Bank (ECB)’s Outright Monetary Transactions (OMT) program indirectly recapitalized European banks through its positive impact on periphery sovereign bonds. However, the stability re-established in the banking sector did not fully translate into economic growth. We document zombie lending by banks that remained undercapitalized even post-OMT. In turn, firms receiving loans used these funds not to undertake real economic activity such as employment and investment but to build up cash reserves. Creditworthy firms in industries with a high zombie firm prevalence suffered significantly from this credit misallocation, which further slowed down the economic recovery.
Date: September 8, 2017
Time: 06:00 P.M.
Venue:
Kamalnayan Bajaj Auditorium
Brookings India
No. 6, Second Floor,
Dr. Jose P. Rizal Marg,
Chanakyapuri,
New Delhi-110021
Location:
Note:
Please RSVP to dgupta@brookingsindia.org
Deputy Governor, Reserve Bank of India.
Abstract:
Launched in Summer 2012, the European Central Bank (ECB)’s Outright Monetary Transactions (OMT) program indirectly recapitalized European banks through its positive impact on periphery sovereign bonds. However, the stability re-established in the banking sector did not fully translate into economic growth. We document zombie lending by banks that remained undercapitalized even post-OMT. In turn, firms receiving loans used these funds not to undertake real economic activity such as employment and investment but to build up cash reserves. Creditworthy firms in industries with a high zombie firm prevalence suffered significantly from this credit misallocation, which further slowed down the economic recovery.
Date: September 8, 2017
Time: 06:00 P.M.
Venue:
Kamalnayan Bajaj Auditorium
Brookings India
No. 6, Second Floor,
Dr. Jose P. Rizal Marg,
Chanakyapuri,
New Delhi-110021
Location:
Note:
Please RSVP to dgupta@brookingsindia.org