New Delhi: Raghuram Rajan today took over as the governor of the Reserve Bank of India at a time when the Indian economy is facing its worst crisis in over two decades. Mr Rajan said India's economy was "fundamentally sound" and had a "bright future" in his first remarks after taking the helm at the central bank earlier in the day.
What you should know about the new RBI governor
- Raghuram Rajan, 50, is the 23rd governor of the Reserve Bank of India. He has been appointed for a period of three years, and will take charge from D. Subbarao, who is exiting after an extended five-year term.
- This will be Mr. Rajan's second assignment in the country. He was appointed the Chief Economic Adviser to the Finance Ministry in August last year.
- He was the Economic Counselor and Director of Research (simply put, the chief economist) at the International Monetary Fund from September 2003 till January 2007.
- Mr. Rajan's claim to fame is his prediction of the 2008 global financial crisis. In his paper titled Has Financial Development Made The World Riskier?, which he submitted in November 2005, Mr. Rajan wrote: "But perhaps the most important concern is whether banks will be able to provide liquidity to financial markets so that if the tail risk does materialize,..." The response to this paper was negative.
- Mr. Rajan has worked as the Eric J. Gleacher Distinguished Service Professor of Finance at the University of Chicago's Booth School of Business.
- Mr. Rajan has also served as the Bertil Daniellson Visiting Professor of Banking and Finance, Stockholm School of Economics, 1996-97; Visiting Professor of Finance, Northwestern University, 1996-97, and the Fischer Black Visiting Professor, Massachusetts Institute of Technology, 2000-01.
- In January 2003, the American Finance Association awarded Mr. Rajan the inaugural Fischer Black Prize, given every two years to the financial economist under age 40 who has made the most significant contribution to the theory and practice of finance.
- He is the author of the popular book Fault Lines: How Hidden Fractures Still Threaten the World Economy, where he has argued that serious flaws in the economy are to blame for the current economic crisis, and warns that a potentially more devastating crisis awaits us if they aren't fixed.
- He earned his bachelor's degree in electrical engineering from IIT-Delhi, before pursuing his MBA in 1987 from the Indian Institute of Management, Ahmedabad, followed by a PhD in 1991 from Massachusetts Institute of Technology. He was a gold medalist at both IIT and IIM.
- Mr Rajan was born in Bhopal on February 3, 1963. He comes from a Tamil family and is married to Radhika, a classmate from the Indian Institute of Management. They have two children.