• About Us
      Asia’s 1 st LEED Platinum Rated Campus

      Asia’s 1st LEED Platinum Rated Campus

      About Us

      • Chairman's Message
      • Vice Chairman & CEO
      • Dean's Message
      • Governing Council
      • Business Advisory Council
      • Academic Advisory Council
      • Work With Us
      • Mandatory Disclosure
      • Anti-Ragging Notice

      TERM ZERO

      Media

      • News
      • Events
      • In Media
      • Media Kit

      Rankings

      Accreditations

      NIRF

      Campus

      Blog

      Annual Events

      • Convocation
      • TEDxGLIMChennai
      • L'Attitude
      • Digital Symposium
      • Sangamitra
      • Annual Alumni Meet
      • SWIM
      • IEC
      • Human Capital Management
  • Programs
      Transform and Lead

      Transform and Lead

      Full Time Programs

      PGPM

      One Year MBA for professionals with work experience

      Learn More Apply Now

      PGDM

      Two Year MBA for professionals with 0-2 years of work experience

      Learn More Apply Now

      EXECUTIVE EDUCATION

      Partner with us for customized learning solutions for your organisation

      Learn More

      Corporate Programs

      PGXPM

      Executive program for Mid & Senior Level working professionals

      Learn More Apply Now APP. Deadline: 30th August, 2020

      PGPM Flex

      Weekend management program for young working professionals

      Learn More Apply Now APP. Deadline: 30th August, 2020

      MBA in Business Analytics

      Family Enterprises Management

  • Faculty & Research
      Ranked 6th

      Ranked 6 th

      by NIRF ranking in teaching and learning among all B-Schools in the country

      Faculty

      • Full Time Faculty
      • Visiting Faculty
      • Adjunct Faculty

      Research

      • Faculty Editors
      • Papers & Journal Publications
      • Case Studies & Books
      • Conference Proceedings

      Centers of Excellence

      • Centre For Excellence in Retail Management
      • Great Lakes Centre For Management Research
      • Kotler - Srinivasan Centre for Research in Marketing
      • Centre for Excellence in Business Analytics and Business Intelligence
      • CET
      • Union Bank Centre for Banking Excellence

      Conferences

      • NASMEI
      • Financial Conference
  • Recruiters & Companies

      “Great Location for Talent. We are happy to continue visiting and having budding professionals join us and grow their careers.”

      Anil Visal

      Partner - Deloitte India

      Campus Recruitment

      • Recruitment Process
      • PGDM Class Profile 2018-20
      • PGPM Class Profile 2019-20
      • Past Recuiters
      • Student Achievements
      • Recruiters Speak

      Internships

      • Recruitment Process
      • PGDM Class Profile 2019-21
      • Live Projects

      Placement Reports

      • PGPM
      • PGDM
      • Internship Report

      Leadership Series

      • Titans Speak
      • Industry Lecture Series
      • Thought Leader Series

      Talent Listings

  • Alumni

RISK OF GLOBAL MARKETS CRASH: THE RBI GOVERNOR’S WARNING – BY Dr. BOBBY SRINIVASAN AND Dr. SUDHAKAR BALACHANDRAN

August 8, 2014 | Posted by bobbysrinivasan << back to blog

In a recent speech, the governor of RBI expressed a serious concern about a possible crash of the global stock markets due to lingering competitive lose monetary policies followed by the developed economies.He said, I quote, “sudden price reversals and sharp spikes in volatility is a real possibility in the near term which may result in the global markets going out of control because of uncontrolled sell-off.

The stock markets of the world emphasize the importance of providing adequate liquidity to sustain it. Any distortions such as credit squeeze in any developed economy could ignite a contagion effect pushing all the markets down. For example, Chinese economy is facing a bubble in the real estate. Millions of square feet of office space and public housing remain vacant there. The banks had advanced trillions of dollars to the development of these assets. Sooner or later, these assets should sell-off providing the liquidity to the bank. On the other hand, similar to the one in public sector banks in India some of which have high non-performing assets, we may find a similar situation in china. Unlike India, where most of the borrowings are internal, a large part of Chinese borrowings come from banks across the world. This could lead to a contagion effect, like the one we saw in 2008 during the sub-prime crisis in the US which created havoc in global stock markets.

Dr. Rajan was accurate in predicting the 2008 crisis, so his warnings should not be taken lightly. It would be far better for the financial world, if all the chairmen of central banks sat together and formulated a clear cut policy which will ensure adequate liquidity to the financial markets. If such coordinated efforts are not taken there is always risk of high-volatility in the financial markets, which will then lead to panic followed by a crash.

For India, we are targeting to achieve an economic growth rate in excess of 5.5%. To do this, we need the global capital market to provide the liquidity. This may come as debt or equity to the country or some combination of both. In the event of global stock market, scouting for funds will not be an easy task. Some estimates say that India needs nearly 1 trillion dollars to push the economic growth to higher levels.

In the meanwhile, let us wait and see as to how things will pen out globally.

<< back to blog

Programs

PGPM - One Year MBA for professionals with 2+ years work experience

Learn More >

PGDM - Two Year MBA for graduates with 0-2 years work experience

Learn More >

Events

Union Bank Finance Conference
Dec 17, 2020

Networking with Champions
Nov 08, 2020

Harry Kraemer on Performance with A Purpose
Oct 08, 2020
Read more

Successful Women in Management (SWIM) Lecture Series
July 05, 2020
Read more

The Great Circle Alumni Talk Series
July 04, 2020
Read more

  • About Us
  • Programs
  • Faculty & Research
  • Recruiters & Companies
  • Alumni
  • Blog
  • Contact Us