Things can get worse now! Raghuram Rajan warns amid banking crisis

Raghuram Rajan on Banking Crisis: Raghuram Rajan, former Governor of the Reserve Bank of India and former Chief Economist of the IMF, has warned that the crisis in the banking sector may deepen in the coming times. He said that in view of the cases of Silicon Valley Bank of America and Credit Suisse Bank of Switzerland, there has been a huge upheaval in the Global Banking System. In such a situation, the world’s banking system is moving towards a big danger.

‘Addiction’ has arisen in the financial system

Raghuram Rajan, former Chief Economist of the International Monetary Fund, had also correctly predicted the recession of 2008. Rajan said that for the last decade, loans were easily available from banks, as they did not lack liquidity, which created an ‘addiction’ in the financial system. But for the last few months, central banks around the world have tightened their monetary policies. In such a situation, its effect is now visible on the financial system. In an interview given in Glasgow, Rajan said that I hope for the best, but given the current situation, the days ahead may be difficult. He said that for the last few years, the flow of liquidity in the market was increased to accelerate the economy, but now it has been suddenly pulled. Due to this, the delicate system dependent on cash has been badly affected.

There are big problems in the banking system

Raghuram Rajan said that the Silicon Valley Bank and Credit Suisse Bank Crisis shows that the root of the financial problem in banks is deep. Along with this, he said that we have forgotten that the impact of monetary policies of banks is very deep, which is not an easy task to handle. In such a situation, its effect is directly visible on the banking system.

Recession was predicted in the year 2005 itself.

In the year 2005, Raghuram Rajan while being the Chief Economist had predicted the Banking Crisis in Year 2008, which later proved to be correct in the year 2008. At that time, the then US Treasury rejected Rajan’s warning as anti-development, but the US banking crisis in 2008 proved Raghuram Rajan’s words to be true.

read this also-

Petrol Diesel Price: Rise in crude oil prices, petrol-diesel became costlier in many cities, know fuel rates