Reddy was in Geneva to speak at a meeting convened by the city-based South Centre on G7 policies and their implications for global stability and growth. Reddy on Friday warned that fragilities in the global financial system could trigger off another major economic crisis unless there is thorough “rebalancing” on several fronts. “Rebalancing has to be between national and global economy, state and market, finance and real,” he said. Moreover, the “asset price inflation engineered by central banks is a key driver of the rise in inequality, ” they warned. Commenting on the report, Reddy said he would agree that “G7 monetary policy capture by financial market” as well as “regulatory capture by large banks and financial industry.” The global financial crisis actually became the global economic crisis which was “transformed into a social crisis, and of late it is manifesting itself in political developments which we are unable to understand fully,” Reddy argued.

Source: Mint April 15, 2018 20:26 UTC