Financial Markets and Economic Resilience
A recent New York Fed Liberty Street Economics paper classifies emerging markets by MSCI stock‑market maturity, separating a "Core" group of 22 economies from a larger "Periphery" set. The analysis shows Core markets—such as India, Korea and Taiwan—have posted faster growth, lower inflation, cheaper sovereign borrowing and larger foreign‑exchange reserves than their Periphery peers. When faced with three major shocks (COVID‑19, the Russia‑Ukraine war, and the 2026 Iran conflict), Core markets experienced far fewer credit‑rating downgrades and smaller spikes in borrowing costs. The author argues that deep equity markets catalyze broader financial development and improve foreign investors’ perception of country risk, underscoring the strategic value of India’s expanding stock market.
Indian Banks: From Credit Provision to Liquidity Provision?
India’s corporate funding is increasingly sourced domestically as the yield gap with US Treasuries narrows to about 2.5%, eroding the cost advantage of foreign‑currency debt. Deepening private‑credit markets now finance even near‑investment‑grade borrowers, exemplified by a recent $3.4 billion rupee‑denominated deal....
Gradual End of Bank Dominance in India
India’s household financial portfolio is shifting away from traditional safe assets toward equities and managed funds. Between March 2021 and March 2025, bank deposits fell from roughly 47.5% to 43.5% of total financial assets, while mutual‑fund and pension holdings rose...