IMF Economist Who Foresaw 2008 Crisis Expects More Bank Troubles
- Ex-IMF chief economist says ‘perverse incentives’ add to risks
- Rajan says monetary policy causing ‘huge spillover effects’
Raghuram Rajan
Photographer: Alejandro Cegarra/BloombergThis article is for subscribers only.
Raghuram Rajan — the former International Monetary Fund chief economist who predicted the global financial crisis more than a decade ago — warned that the banking system is headed for more turmoil after the rescues of Silicon Valley Bank and Credit Suisse.
Rajan, who was also governor of Reserve Bank of India, said a decade of easy money and a flood of liquidity from central banks has caused an “addiction” and a fragility within the financial system as policy makers tighten policy.