Urjit R Patel: Financial regulation and economic policies for avoiding the next crisis

Speech by Dr Urjit R Patel, Governor of the Reserve Bank of India, at the 32nd Annual G30 International Banking Seminar, Inter-American Development Bank, Washington DC, 15 October 2017.

The views expressed in this speech are those of the speaker and not the view of the BIS.

1. Let me start by reminding ourselves of some numbers that are a key backdrop for today's panel discussion. Total global external liabilities have grown from 30 per cent to 190 per cent of global GDP between 1980 and 2015, far outpacing the growth in global trade (from 19 per cent to 28 per cent of GDP over the same period). The main vehicle of this new globalisation has been cross-border banking flows, which constituted a third of global capital flows in the decade prior to the financial crisis. In parallel, the global trade network has become increasingly interconnected through supply chains that transcend national borders, and by the advent of new players, especially from the developing world. China now accounts for about 11 per cent of global trade and emerging market and developing countries (EMDCs) taken together contribute 37 per cent (up by about 15 percentage points since 2000).