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RBI Governor Warns Against Complacency, Stresses Alertness to Financial Risks Amid Global Strain
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News18•03-10-2026, 15:27
RBI Governor Warns Against Complacency, Stresses Alertness to Financial Risks Amid Global Strain
- •RBI Governor Sanjay Malhotra cautioned that prolonged financial stability can foster excessive risk-taking and leverage, urging constant vigilance from policymakers and financial institutions.
- •Malhotra highlighted that the global economic order, which supported decades of globalization and stability, is now under significant pressure due to geopolitical fragmentation, trade restrictions, and supply disruptions.
- •He emphasized that central banks must integrate broader global economic and geopolitical shifts into their assessments of monetary and financial stability, as these factors interact unpredictably.
- •The Governor noted that while the world economy and India have shown resilience to shocks, fading memories of past crises can diminish prudence, making vigilance against emerging risks crucial.
- •Malhotra warned that banking and financial stresses can develop rapidly and take years to resolve, underscoring the need for proactive measures.
Key Questions Answered
RBI Governor Sanjay Malhotra cautioned that prolonged periods of financial stability can encourage excessive risk-taking and leverage as memories of past crises fade. He noted that policymakers and financial institutions must remain alert even when markets appear resilient.
The RBI Governor cited geopolitical and geoeconomic fragmentation, strategic realignment, trade restrictions, recurring supply disruptions, technological changes, and climate risks as factors straining the post-Washington consensus global order.
According to the RBI Governor, central banks can no longer assess price and financial stability in isolation from broader global economic shifts, geopolitical tensions, and unpredictable cross-sector interactions.
