Archive for December 30th, 2016

The recent Financial Stability Report should have analysed central bank’s own contribution to rising banking risk..

December 30, 2016

Blogging is back after a short break. One remonetised energies but time to get back to demonetising it..

One does not know in recent history a central bank/banking regulator which has enforced the kind of stress on its own banking system. The kind of stress Indian central bank has imposed on Indian banks (and its staff is appalling) and shocking. A former RBI Governor once said the purpose of Indian central bank is to safeguard the Indian public from the Government! But what happens when a central bank attacks all possible safeguards itself? Who saves from the so called saviour?

What is even worse is to see the central bank just excuses itself from the ongoing mess so easily. In the recent Financial Stability Report (Nov 2016), RBI raises concerns on the banking system:

(more…)

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