In its Financial Stability Report (FSR), the Reserve Bank has stated the important thing about the increasing gap seen in the financial market and real economy. The central bank believes that the isolation in the economy and financial markets is increasing and it is getting worse day by day. RBI Governor Shaktikanta Das wrote in the Financial Stability Report that the growing gap in both markets has emerged as a challenge to the stability of the financial sector.
The Financial Stability Report of RBI states that- Increasing the valuation of financial assets puts financial stability at risk. Banks and other financial institutions should be aware of these dangers of interconnected financial arrangements.
In August last year, the Reserve Bank warned
Please tell that this is not the first time that the Reserve Bank is giving information about this risk. In August last year also, the Reserve Bank had warned the financial institutions about the correction of the stock market anytime.
The Reserve Bank has told how the government and the central bank have taken necessary steps for the stability of the financial market, but still there is some disconnect in the financial and some sectors of the stock market and the real economy.
Warning to banks and other financial institutions
It has been written in the Reserve Bank’s report that if something happens upside-down in the period of uncertainty, it can get a big impact on the banking sector and its balance sheet. Overall, the Reserve Bank has warned the bank and other financial institutions that the market’s momentum is uncertain and so take special care of your balance sheet.
Not only India, markets all over the world have seen a great boom in the past. Liquidity has increased due to the relief packages given by governments around the world after Corona and people are investing in high interest markets.
