RBI governor Raghuram Rajan warns of another market crash

Reserve Bank governor Raghuram Rajan has warned that global markets are at the risk of a ‘crash’ due to the lingering competitive loose monetary policies being followed by the developed economies. Warning that the current build-up of financial sector imbalances may cause sudden price reversals and sharp spikes in volatility, Rajan said, ‘we are taking a greater chance of having another crash at a time when the world is less capable of bearing the cost’.  In an interview to London-based 'Central Banking Journal' on Wednesday, he said, ‘unfortunately, a number of macro- economists have not fully learned the lessons of the great financial crisis. They still do not pay enough attention - en passant - to the financial sector. Financial sector crises are not as predictable. The risks build up until, wham, it hits you’, according to THE TIMES OF INDIA.