Global Crisis, Financial Institutions and Reforms: An Indian Perspective

Dilip M. Nachane ()
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Dilip M. Nachane: Indira Gandhi Institute of Development Research (IGIDR)

Chapter 7 in Analytical Issues in Trade, Development and Finance, 2014, pp 97-124 from Springer

Abstract: Abstract The relationship between finance and economic growth has witnessed a lively controversy and sharp divisions among schools of economic thought. However, even within the broad consensus recognizing the role of financial systems for economic development, important areas of disagreement persist, viz. the type of financial system most conducive to growth, private versus public ownership of financial institutions, the degree of regulation and supervision, the role of financial innovations and the pace and extent of financial liberalization. The Latin American crises of the 1980s and 1990s, the Asian financial crisis and the current global recession have once again brought the critical role of financial institutions under the scanner and introduced some important caveats to the consensus. The present chapter aims to take stock of some of these issues in the Indian context. While it is certainly not being claimed that the Indian experience is representative of the entire South Asian region, it is nevertheless felt that some of the lessons drawn here would have some relevance transcending their immediate context.

Keywords: Financial liberalization; Financial crises; Indian financial system; Non-bank financial institutions (NBFIs); External value of the Indian currency; The efficient markets doctrine; The MacKinnon–Shaw thesis; Casinos; Herd instincts; Total factor productivity (TFP); Risk premia on loans; Financial Stability Board (FSB); International standard-setting bodies—Basel Committee On Banking Supervision (BCBS); International Organization Of Securities Commissions (IOSCO); National regulatory and supervisory authorities; IMF; Off-balance sheet activities; Leverage ratio; Collateral damage; G20; Revised role of IMF; Global savings glut; OPEC; East Asia; Eurozone; Price bubble; OECD; MBS; CDOs; Emerging market economies (EMEs); Financial sector reforms in India; Keynesian view of financial markets; Capital account convertibility (CAC); Tarapore—I and II; Regulatory and supervisory independence (RSI); National Commission for Employment in the Unorganized Sector (NCEUS); Percy Mistry report; Raghuram Rajan report (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/978-81-322-1650-6_7

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