The World's Economy Is Heading Towards Recession

Economic Recession

India is doing well on economic front but according to RBI Governor of India Mr. Raghuram Rajan the world is facing a 1930 like recession situation. Rajan was addressing to London Business School Conference where he said that the global economy is heading southwards and the banks all over the world must redefine the rules of banking.

However, whatever Rajan said could well be the truth as far world economy is concerned but the economists feel that India is in a strong financial situation for the time being and there is no threat of recession in near future.

The Indian conditions are all together different where to obtain investment the banking sector needs to reduce interest rates. What Rajan feels is that the banks world over should sit together and make uniform policies to face the situation.

According to Governor of RBI the time is just right when the world of banking should consider uniform policies in all countries and make international policies to keep recession under control. What Rajan feels is that it is not up to a particular country to decide or make rules but this should be a collective decision. The rules must come into force after wide discussions, researches and after coming to an agreement by international forums on economical issues.   

However Mr. Raghuram Rajan feels that as far Indian markets are concerned the basic need is to attract as much investment from all sectors and that will require Indian banks to reduce the interest rates which will help companies get more investment at a cheaper interest rate.


Rajan feels that global markets are trying to shift others’ growth to their areas and this is almost the same situation which we faced during 1930 when the cut throat competition with each other sent the markets in deep trouble. We are almost passing through the same stage where the markets are looking for growth from all international sectors at the cost of others which might send the global economy in the state of being unaware of what is happening around. Mr. Rajan says, let the world banking system come forward and play a vital role in uplifting the cause of world economy. 

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Keywords :
Banking , Economy , World , Governor , Indian , Markets , Growth , Shift , Recession , Interest


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