Jag har haft fel förut; I dag 14 juli 2010 trodde jag den ekonomiska världen skulle gå under
Att jag trodde det beror på vad Martin Wolf skrev i dagens Financial Times.
Raghuram Rajan of the University of Chicago Booth School of Business and former chief economist of the International Monetary Fund
notes in a thought-provoking new book, the underlying “fault lines” are still with us.
Englund blogg 14 juli 2010
https://englundmacro.blogspot.com/2010/07/i-dag-trodde-jag-den-ekonomiska-varlden.html
Raghuram G Rajan
Mest känd är han för det anförande han höll i augusti 2005 på det årliga mötet för världens riksbankselit i Jackson Hole i Wyoming.
Han varnade då för att världen var på väg mot en stor finansiell kris
Rajans tal är väl värt att läsa idag. I Jackson Hole 2005 väckte det däremot nästan ingen uppmärksamhet.
De flesta deltagare menade att Rajan inte förstod sig på den nya tidens ekonomi.
Janerik Larsson SvD 12 juni 2022
https://englundmacro.blogspot.com/2022/06/raghuram-g-rajan.html
Copilot:
His presentation, titled "Has Financial Development Made the World Riskier?", explored the transformative changes in global financial systems over the preceding decades.
Rajan highlighted how advancements in technology, deregulation, and institutional changes had expanded financial markets and increased risk-sharing capabilities.
However, he also warned about the potential dangers of excessive risk-taking by financial intermediaries, which could lead to financial instability under certain conditions2.
At the time, his warnings were met with skepticism, as many participants believed he misunderstood the dynamics of modern finance. Yet, his insights gained significant recognition after the 2008 financial crisis, which validated many of his concerns.
Raghuram Rajan's 2005 Jackson Hole speech, *"Has Financial Development Made the World Riskier?"*, presented a nuanced analysis of the evolving financial landscape.
Here are the key arguments he made:
1. **Technological and Institutional Changes**: Rajan highlighted how advancements in technology, deregulation, and institutional changes had revolutionized financial markets. These developments allowed for greater risk-sharing and access to finance, benefiting economies globally.
2. **Emergence of New Financial Intermediaries**: He pointed out the rise of entities like hedge funds and private equity firms, which played a significant role in reshaping financial systems. These intermediaries often took on substantial risks, which could amplify economic fluctuations.
3. **Increased Risk-Taking**: Rajan warned that the competitive nature of financial markets incentivized excessive risk-taking. Financial institutions, in their pursuit of higher returns, often engaged in activities that could lead to instability.
4. **Potential for Systemic Risks**: He argued that while financial innovations spread risks more broadly, they also created vulnerabilities. For instance, the interconnectedness of financial institutions meant that a failure in one area could have cascading effects.
5. **Policy Recommendations**: Rajan suggested that policymakers adopt market-friendly measures to curb excessive risk-taking. He emphasized the importance of prudential supervision and the need for financial institutions to internalize the risks they create.
At the time, his warnings were largely dismissed as overly cautious. However, the 2008 financial crisis validated many of his concerns, cementing his reputation as a prescient thinker in the field of economics.
Multiple lenders are chasing the same borrowers amid stagnant incomes at the bottom of the pyramid.
Bloomberg 3 april 2025
There is no chance of a "Lehman moment" in India. Raghuram Rajan, the governor of Reserve Bank of India
https://englundmacro.blogspot.com/2016/05/there-is-no-chance-of-lehman-moment-in.html
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