Prevent contagion, preserve value

With the pandemic showing no signs of abating and hopes of sharp economic recovery to pre-pandemic levels receding, dark clouds are gathering on the horizon for India’s beleaguered financial system. While the largest US banks have squirrelled away billions of dollars in anticipation of a wave of de­faults, and the UK is considering a host of proposals, including swapping debt with the government in return for equity stakes and setting up a bad bank, we are yet to see concrete measures being undertaken in our country.

As was highlighted in the co­mments by Reserve Bank of In­dia (RBI) Governor Shaktikanta Das,

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