The central bank chief who saw the 2008 crash coming takes back that whole 'next Great Depression' thing he said
But now the central bank is backtracking on those comments.
In a statement, Royal Bank of India general manager Alpana Killawala said the press "mis-characterized" Rajan's remarks:
The Great Depression was a period of great turmoil, caused by many factors and not just beggar-thy-neighbour policies. Governor Rajan did not imply or suggest that there was any risk of the world economy, which is in steady recovery notwithstanding uncertainties like those in the Euro area, slipping into a new Great Depression.
According to local Indian media, Rajan warned at a London Business School conference that, in a global collective effort to "produce growth out of nowhere," we could be "shifting growth from each other, rather than creating growth."
"Of course, there is past history of this during the Great Depression when we got into competitive devaluation," he reportedly said.
Rajan, a former IMF chief economist, has previously voiced concerns that central banks are pushing toward competitive monetary easing.
The official script that Rajan was speaking from, released by the RBI, read: "I use Depression era terminology because I fear that in a world with weak aggregate demand, we may be engaged in a risky competition for a greater share of it. We are thereby also creating financial sector risks for when unconventional policies end."
Here's the script.
- I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
- Colon cancer rates are rising in young people. If you have two symptoms you should get a colonoscopy, a GI oncologist says.
- Saudi Arabia wants China to help fund its struggling $500 billion Neom megaproject. Investors may not be too excited.
- Catan adds climate change to the latest edition of the world-famous board game
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- JNK India IPO allotment – How to check allotment, GMP, listing date and more
- Indian Army unveils selfie point at Hombotingla Pass ahead of 25th anniversary of Kargil Vijay Diwas