The report found that countries such as India have taken steps to reduce non-performing loans but stressed that additional and more timely action is needed.
The report suggested for improved policies to manage corporate distress.
The report warned of rising medium term risks and said global financial stability will now depend on how well financial institutions adapt to the new era of low growth and low interest rates.
The financial stability risks such as the Brexit and its possible global repercussions are discussed. The high levels of corporate indebtedness in emerging markets and uncertainties about China’s growth transition have abated medium-term challenges are now coming up.
Medium-term risks are building because we are entering a new era, characterised by chronic weak growth, prolonged low interest rates and growing political and policy uncertainty.
Noting that banks would need sustained profits to support economic recovery. The report asked RBI to tackle substantial structural challenges.
