Washington, July 03: Indian analyst Raghuram Rajan, named as the next International Monetary Fund chief economist, said he wanted to grapple with instability in the financial and banking systems. "I do think that one of the reasons for my appointment is that the IMF wants to spend more time on financial sector issues and on banking," Rajan told newspersons after being named to the job yesterday.

"Those certainly will be areas that I will look a little more at: how to ensure greater financial sector stability and how to ensure greater banking stability."

Financial sector stability, and issues such as corporate governance had been a concern of the IMF for some years, especially since the Asian financial crisis broke out in 1997, he said.

"Without naming specific countries, we know there are many countries around the world that have serious problems in the banking sector," Rajan said.
"Certainly, taking a look at some of those issues will be important: not just the ones that have problems now, but more generally how to improve financial infrastructure even for countries that are off the radar screen right now."

IMF managing director Horst Koehler, announcing his choice, said that Rajan had been at the forefront of work on banking and financial sector issues.

"With his exceptional rise within the economics profession as well as with his extensive experience, Mr Rajan will bring a strong and proven record of intellectual leadership to the IMF," Koehler said in a statement.
Bureau Report