ASSESSING AND MITIGATING THE IMPACT OF GEOPOLITICAL RISK UNCERTAINTY ON THE INDIAN FINANCIAL SECTOR: A POLICY PERSPECTIVE

Satish Kumar () and Amar Rao ()
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Satish Kumar: Indian Institute of Management Nagpur, India
Amar Rao: Munjal University, Gurugram, India

Bulletin of Monetary Economics and Banking, 2024, vol. 27, issue 3, 483-526

Abstract: The study explores the impact of geopolitical risk uncertainty on the Indian financial sector, focusing on bonds, banking, currency, and the equity markets. It uses a Quantile Vector AutoRegression (QVAR) approach to examine shock transmission under different market conditions. Results show that geopolitical risks significantly influence the Indian financial sector, with varying levels of shock transmission across different market conditions. The currency and banking sectors show heightened sensitivity during periods of increased uncertainty. The findings suggest the need for effective monitoring systems and comprehensive risk management strategies to mitigate the adverse effects of geopolitical risks.

Keywords: Geopolitical risk, Financial sector, India; Policy implications, Risk management, Shock transmission (search for similar items in EconPapers)
JEL-codes: C32 E44 F37 G01 G15 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:27:y:2024:i:3e:p:483-526

DOI: 10.59091/2460-9196.2278

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