On 11 January, 2021, RBI released its 22nd issue of the Financial Stability Report. In his foreword, RBI Governor Shaktikant Das flagged the many risks ahead, including the recent disconnect between certain segments of financial markets and the real economy. Mr. Das warned, “Stretched valuations of financial assets pose risks to financial stability,” adding “banks and financial intermediaries need to be cognizant of these risks and spillovers in an interconnected financial system.”
In this banking brief, we have covered the first chapter out of three chapters of Financial Stability Report i.e. Macro Financial Risks. To know more details about it, kindly have a look at the post.