Risk of undercapitalisation for state-owned institutions: Nobel winner

The issue of undercapitalisation could be dealt with through the new bankruptcy code which could help recovery of capital, and have the same effect as recapitalising them, he said

Noble-prize winning economist Robert Engle said that a number Indian financial institutions may require significant additional capital in the event of a financial shock.

The majority of financial institutions that show such signs of the need for additional capital were state-owned banks, he said in a talk in Mumbai on Tuesday.

He was speaking at the Dr R H Patil Memorial Lecture 2019 in Mumbai on Tuesday. Engle won the prize in 2003 for his work on a concept called autoregressive conditional heteroskedasticity (ARCH). His work helps researchers and analysts for asset pricing and also as a tool to measure