6 January 2017
The editorial of Day is being carried by DNA- “Expose the willful defaulters!” . The editorial does not mince words about the unwillingness of Reserve Bank of India to reveal names of loan defaulters and also lack of will to tackle the non performing assets. Read on-”… The RBI’s chary attitude to willful defaulters is untenable…But today the biggest danger is of banks failing because of the huge percentage of bad loans on their books. Merely, writing off the loans to clean the books and start on a fresh slate is no solution either…”. However, the question of accountability of the Reserve Bank of India in failing to fulfill its responsibility as the Central Bank has not been visited , not to forget the role of leading economists at high places enjoying life.
Many economists have focused on the role of the government in the lives of mainstreet, but is the welfare merely dependent on the functioning of some defunct economists armed with some PhD on irrational game theories/derivates? This lead to financial crisis of 2008, but accountability improved?
Recently, the Chief Economist of Bank of England- Andy Haldane has recently conceded that there was “a massive oversight” in economists’ models before the crisis which did not account for crises in the financial system. It took him only 8 years to say this! Robert Frank has correctly pointed out that “Psychologists sometimes describe economists who pose such questions as having high I.Q. but no clue." What has been the role of the leading financial institutions of the world? Is the role of these institutions limited to fetching fat salaries? The irony is that the leading economists maintain that they had no clue of what went wrong during 2008, but they claim that they are working smarter and are brighter! Surely, they can’t hide under asymmetrical information, as they were the torch bearers at daylight.
And in India, Reserve Bank of India has not learned a lesson. A financial crisis is in making…… but you care?