A wand for Raghuram Rajan4 min read 18 Aug 2013, 08:03 PM IST
The governor of RBI needs to understand links between rural credit markets and the formal monetized sector
Raghuram Rajan deserves everyone’s congratulations on his elevation to the Reserve Bank of India’s (RBI’s) governorship. Having a doctoral degree from a top school is a rarity among India’s policymakers. Rajan earned a PhD in finance at MIT’s management school in 1991 for a thesis titled Essays on banking, having to do, we are told, “with the downside to cozy bank-firm relationships". He has been president of the American Finance Association. During Anne Krueger’s reign as first deputy managing director at the International Monetary Fund (IMF), he held the top research position there once held by the late Michael Mussa. Rajan has thus come to be well-known over the last decade in the West’s financial media. Given the dismal state of India’s credit in world capital markets, it is an asset for a new RBI governor to have.