Current bank runs in the US and Switzerland are the failures of the new global financial order put in place after the 2007-08 financial crisis, ironically, to avoid such eventualities
As the Reserve Bank of India has kept key rates unchanged, fixed deposit rates at banks are at a historic low. As a result, banks have lost their power to attract money, says Zerodha’s Nikhil Kamath.
Several studies have shown that foreign banks play a positive economic role, especially in emerging markets, by increasing local banks’ efficiency. India is no exception.
Shares of Bank of Baroda took a beating, while Dena Bank’s shares received a boost following the government’s announcement suggesting a merger of the two lenders along with Vijaya Bank.
Opinion is divided but most agree that without well executed reforms at public sector banks, recapitalisation will be nothing more than putting good money into bad assets.