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Institute Lecture Series by Prof. Viral Acharya

Title: Financial Instability and Prompt Corrective Action

Speaker: Prof.Viral V. Acharya, Deputy Governor, Reserve Bank of India (RBI)

Day & Date: Friday, October 12, 2018

Time: 6.30 PM

Venue: P.C. Saxena Auditorium, IIT Bombay

 

Abstract:

The talk introduced banks and markets as financial intermediation arrangements that arise in an economy to efficiently to channel the savings to entrepreneurs (and corporations), creating liquidity for both savers and entrepreneurs. It explained critical differences between banks and markets focusing on the immediacy with which savers can withdraw their "deposits" from banks relative to their ability to obtain back their funds with immediacy from markets. It then focused on why financial crises arise, why banks are often at the center of such crises, and why financial instability can impede economic growth for several years after their inception.

 

About the Speaker:

Professor Viral V. Acharya is a Deputy Governor at the Reserve Bank of India (RBI) in charge of Monetary Policy, Financial Markets Operations and Regulation, and Research and Statistics.  He also holds the position of C V Starr Professor of Economics at the Department of Finance at New York University Stern School of Business (from where is on leave since Jan 20, 2017). Prof. Acharya completed his Bachelor of Technology in Computer Science and Engineering from the Indian Institute of Technology Bombay in 1995 and PhD in Finance from NYU-Stern in 2001. Prior to joining Stern, he was at London Business School (2001-2008), the Academic Director of the Coller Institute of Private Equity at LBS (2007-09) and a Senior Houblon-Normal Research Fellow at the Bank of England (Summer 2008). Prof. Acharya's primary research interest is in theoretical and empirical analysis of systemic risk of the financial sector, its regulation and its genesis in government-induced distortions, an inquiry that cuts across several other strands of research – credit risk and liquidity risk, their interactions and agency-theoretic foundations, as well as their general equilibrium consequences. Prof. Acharya is the recipient of the inaugural Banque de France – Toulouse School of Economics Junior Prize in Monetary Economics and Finance, 2011, and recently the 2017 Alexandre Lamfalussy Senior Research Fellowship of the Bank for International Settlements (BIS). He has also received the Distinguished Alumnus Award 2018 during the Foundation Day Celebrations at IIT Bombay on March 10, 2018.