In 2006, when the US yield curve got inverted predicting a recession, the whole idea was dismissed as having finally failed only to be confirmed by the Great Recession. In a very recent paper, Chinn and Kucko2 examine the issue for the US, the euro area and eight European countries.
In his Guhan Memorial Lecture last month, Dr. Reddy called for “back to basics” in banking and urged that banks must curb the tendency towards further financialization of deposits they mobilize and must focus instead on lending to real sectors of the economy, particularly agriculture and the small and medium industries, that have limited ability to tap the capital markets. 7.