“The global meltdown of 2008 brought to the fore the failings of the Western model of economics, particularly the Anglo-Saxon model of banking. This model should not be aped by India,” said noted columnist S Gurumurthy. He was speaking at the two-day 19th All-India conference of Corporation Bank Officers’ Organisation (CBOO) at the Chennai Trade Centre on Saturday.
To stress his point, he cited a news report by the German magazine Der Speigel, in which four Nobel laureates economists, when questioned why the world was in its current economic crisis and what could be done to alleviate it from the situation, were flabbergasted and could not offer any solution.
Quoting statistics, he said that a latest report on American banking had suggested that in between the years 2001-05, the home equity in the US economy had shot up by a large almost 3.2 trillion dollars, which he said was an unhealthy trend. Contrasting this with the Indian scenario, which he said was a bank-led economy, Gurumurthy called for the generation of fresh ideas in the banking sector. In this regard, he pointed out that the nation’s non-corporate sector, which had witnessed robust growth was largely being neglected by banks. “Internalisation of ideas to enable schemes that suit the nation, is the need of the hour. This will lead the nation on the path to better economic growth.”
He also pointed out that the household savings in the nation was its strong point, which was fuelling its growth. “Investment in the stock market in most strong Asian economies such as China, Taiwan, Japan and Thailand comprises a very small portion, while in the US, whose economy is on the precipice, it is a whopping 55 per cent,” he said.
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