Investors could not refinance themselves other than through fire sales of distressed assets. Amsterdam bank houses went bankrupt and merchants suffered significant losses.1 The 1763 crisis has some important resemblances with today’s crisis. In the first stage of today’s crisis, liquidity was at the epicentre. Money markets seized up and several market participants found themselves unable to roll-over funding positions.
External sector India’s linkages with the global economy are getting stronger, underpinned by the growing openness of the economy and the two way movement in financial flows.