Though RBI has been conservative, such banking crises pose risks to broader Indian economy — potential flight of foreign portfolio capital, pressure on rupee, bad news for stock market.
India, China & Malaysia want to be full-fledged members of the global financial system but insist on regulatory systems designed to ensure tight control.
This is the game every nation is now learning to play. Some are finding new allies or seeing value among nations where they’d seen marginal interest. The starkest example is India & Europe.
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