Raghuram Rajan, Who Foresaw 2008 Crisis, Expects More Bank Troubles
NDTV
Raghuram Rajan's comments add to warnings that the troubles at Silicon Valley Bank and Credit Suisse are indicative of deeper underlying problems in the financial system.
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.
Mr 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.
"I hope for the best but expect that there might be more to come, partly because some of what we saw was unexpected," Mr Rajan said in an interview in Glasgow. "The entire concern is that very easy money (and) high liquidity over a long period creates perverse incentives and perverse structures that become fragile when you reverse everything."
His comments add to warnings that the troubles at SVB and Credit Suisse are indicative of deeper underlying problems in the financial system.
