Global Debt, AI Risks Among 5 Financial Stability Threats, Says RBI Governor Malhotra
Malhotra warned that stretched AI valuations, rising debt and cyber threats could trigger sharp asset repricing and capital flow reversals.
- On Saturday, RBI Governor Sanjay Malhotra addressed the Kautilya Economic Conclave, asserting that India remains resilient while cautioning that prolonged financial stability can encourage dangerous risk-taking and leverage.
- AI-Related investment cycles have emerged as a key support for global financial markets, yet Malhotra cautioned that any slowdown in earnings could trigger sharp repricing of financial assets across the value chain.
- Corrections in AI-related valuations in advanced countries may have a "positive impact in terms of capital inflows" for India, Malhotra noted, positioning emerging markets as potential beneficiaries.
- Addressing cryptocurrencies, Malhotra said the RBI maintains a cautious approach, citing concerns over the "singleness of money" and implications for monetary policy in emerging markets.
- Bond yields are hardening globally amid rising public debt, prompting Malhotra to warn that "today's resilience may not necessarily imply tomorrow's immunity" against financial stress.
22 Articles
22 Articles
RBI remains cautious on crypto, backs underlying technology: Governor Malhotra
Governor Sanjay Malhotra says India supports innovation in distributed ledger technology and tokenisation, but is wary of cryptocurrencies over concerns about monetary sovereignty and capital flows
RBI remains cautious on crypto, backs underlying technology: Governor Sanjay Malhotra
India's cautious approach towards cryptocurrencies emphasises the importance of underlying technologies like distributed ledger and tokenisation. RBI Governor Sanjay Malhotra expressed concerns regarding monetary sovereignty and its effects on capital flows. While domestic payments are efficient, challenges remain in cross-border transactions, which may benefit from central bank digital currencies. The rising public debt and bond yield movements…
No sign of stress, but cost of allowing vulnerabilities to build ‘simply too high’, says RBI Governor
Speaking at the Kautilya Economic Conclave, Sanjay Malhotra called for vigilance as very prolonged periods of stability can encourage risk taking and fade memories of past crises.
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