Rbi: Global macro, financial market risk perceptions receding: RBI – Times of India

NEW DELHI: Risk perception across global, macroeconomic and financial market categories of systemic risk receded whereas it recorded a marginal uptick for institutional risks. Risks from global spillovers remained in the ‘high’ risk category, a survey conducted by the RBI has shown.
Financial market risks declined from ‘high’ risk to the ‘medium’ risk category. Macroeconomic risks remained in the ‘medium’ category, and were perceived to have moderated, results of the 24th round RBI’s Systemic Risk Survey (SRS) conducted in May showed. This is a survey of experts, market participants and academicians. Tightness of global financial conditions, global growth slowdown, rise in commodity prices, reversal of capital flows, increase in climate and geopolitical risks have been identified as risks in the months ahead for financial stability, according to the survey.
Major drivers of global risks such as risks to global growth, commodity price risk and risk emanating from monetary tightening in advanced economies were perceived to have declined, according to the survey.
All the drivers of financial market risk, which include foreign exchange rate risk, equity price volatility, interest rate risk and liquidity risk were gauged to have decelerated from ‘high’ to ‘medium’ risk category.
Decline in risk perception on domestic growth and inflation, fiscal deficit, current account deficit, and capital flows resulted in moderation in overall macroeconomic risks. However, macroeconomic risk resulting from climate change was perceived to have amplified, the results showed.
Cyber risk, a major institutional risk, declined from ‘high’ risk category to ‘medium’ risk category. About 54% of the respondents reported that their confidence in the stability of the global financial system has declined over the last six months.