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Will the global economy bend or break?

What's different this time is that global financial stress - which has its genesis in four policy choices made in recent years - is juxtaposed with a more resilient real economy

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Sajjid Chinoy
The global economy is currently riddled with contradictions. One part is well-known. That some financial institutions are under stress across both sides of the Atlantic, reflecting both idiosyncratic factors (inadequate risk management, failed restructurings) and systemic pressures (the sharp rise in interest rates over the last year coupled with loosening of regulations for mid-sized banks in the US). Frankly, that stress would emerge somewhere in the system was inevitable on the back of the most aggressive and synchronised global monetary tightening in four decades. Something somewhere was bound to eventually break. The question always was, where, and more pertinently, would
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First Published: Mar 20 2023 | 10:16 PM IST

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