Synchronised tightening of monetary policy globally has progressively increased the risk of a hard landing, i.e., a recession to tame inflation. India is, however, differently placed.
Again, the crisis vividly raised awareness on the endogenous nature of many systemic episodes of financial instability and on their negative externalities that could be of great importance in determining macroeconomic outcomes. From a policy perspective, the new focus has led to an increased interest in the macro-prudential approach to bank regulation and supervision, following ideas developed originally by the Bank for International Settlements.