Indian finance experts visit UCSC for advice on reforming India's economic system

Ajay Shah
Ajay Shah
Ila Patnaik
Ila Patnaik

Two experts investigating ways to reform India's financial system visited UC Santa Cruz for a workshop into economic systemic risks as they provide technical support to a commission that will make recommendations to the Indian Ministry of Finance.

Ajay Shah and Ila Patnaik from India's National Institute of Public Finance and Policy (NIPFP), in New Delhi, took part in a one-day workshop that brought together experts in finance and international economics from UCSC, UC Berkeley, UC Davis, and the Federal Reserve Bank of San Francisco. 

The workshop, discussion, and debate was organized by Professor Nirvikar Singh, co-director of UCSC's Sury Initiative on Global Finance and International Risk Management.

Singh said Shah and Patnaik lead the technical team advising the Indian government on reforming its financial sector laws and regulations. Both had visited UCSC before and wanted to return to hear from UCSC's economic experts, specifically on systemic risk: the collapse or potential collapse of an entire financial system or market. The global economic crisis of 2008-2009 was top of mind during discussions of bubbles, credit surpluses or shortages, and tumbling markets.

"We came all this way for this meeting," said Shah.  India requires a trillion dollars of infrastructure investment in coming years, he said, and must reform its financial system in order to attract the investment needed, while also not destabilizing the growing Indian economy. Shah, who has been listed as one of India's top 10 economists, received his Ph.D. in economics from the University of Southern California after earning a BTech in aeronautical engineering from the Indian Institute of Technology in Bombay.

Patnaik, a senior fellow at the NIPFP, noted that Singh had brought together academic experts, policymakers, as well as practitioners, which provided Shah and her with a broad perspective for their work ahead.

Also joining the group were UCSC graduate students in macroeconomics, who work under the guidance of economics department chair and monetary policy expert Carl Walsh.

Participants heard presentations from Michael Dooley, Joshua Aizenman, and Michael Hutchison of UCSC; Terrance Odean from UC Berkeley; Óscar Jordá of UC Davis and the Federal Reserve Bank of San Francisco; Jose Lopez, vice president of economic research at the Federal Reserve Bank, and Mark Spiegel vice president of international research at the Federal Reserve Bank.

SIGFIRM was founded at UCSC to guide practitioners and policymakers in an economic world of increased uncertainty, globalization and use of information technology.  It is funded by a generous seed grant from UCSC alumnus Sharath Sury.