India's Rajan Sees Risk of New Crisis on Loose Monetary Policies

Thursday, 07 Aug 2014 11:34 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

The world is at risk of another financial crisis as monetary stimulus in developed economies encourages investors to take risks and boost asset prices, Reserve Bank of India Governor Raghuram Rajan said in two interviews.

“We are taking a greater chance of having another crash at a time when the world is less capable of bearing the cost,” Rajan told the Central Banking Journal.

Global monetary authorities must coordinate more closely and create a safety net to protect developing countries and avoid a “merry-go-round” of perpetual crisis, he told U.K. newspaper The Times.

Rajan has been a vocal critic of developed nations’ monetary policies and their impact on the rest of the world. The former International Monetary Fund chief economist said the world hasn’t learned its lessen from the credit crisis and criticized the use of quantitative easing and other “extreme monetary actions,” according to The Times.

Investors are counting on “easy money” being available for the foreseeable future and thinking they can sell before everyone else does, he was quoted as saying by the Central Banking Journal.

“They put the trades on even though they know what will happen as everyone attempts to exit positions at the same time,” he said. “There will be major market volatility if that occurs.”

Rajan said the problems arising “are not so much from credit growth, which is relatively tepid in the industrial markets and has been much stronger in emerging markets, but from asset prices due to financial risk-taking,” the Journal reported.


© Copyright 2014 Bloomberg News. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Jobless Claims Increase to Almost Three-Month High

Wednesday, 26 Nov 2014 08:36 AM

The number of Americans filing new claims for unemployment benefits last week rose to the highest level since September, . . .

Workers Can Now Merge 401(k) Plans into Company Pension Plans

Tuesday, 25 Nov 2014 18:45 PM

Those of us who work for companies that have both 401(k) plans and defined-benefit pensions are in luck. . . .

CNBC: Consider Defense, Utility Shares if GDP Growth Slows

Tuesday, 25 Nov 2014 19:20 PM

If economic growth slows, as some analysts expect, CNBC suggests investors should take a look at defensive sectors, such . . .

Most Commented
Top Stories

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved