Acharya too favoured independence of banks

The government on Wednesday appointed Viral V. Acharya, a New York University economics professor as the new deputy governor at the Reserve Bank of India.

Mr Acharya has often praised former RBI governor Raghuram Rajan for his works and once said, “Raghu has been a great source of inspiration for me”.

While giving a Deutsche Bank Prize in Financial Economics plenary lecture in 2013, Mr Acharya had narrated an incident when someone asked him on a flight whether he was Raghuram Rajan, after seeing him, an Indian, with papers on banking and crisis. He quipped that was the day when he realised that if he had Mr Rajan as a “role model” and could get even 5-10 per cent of him, he could have easily passed off as “poor man's Raghuram Rajan” on flights.

Just like Dr Rajan, Dr Acharya has also been a strong votary of the independence of central banks and favoured them being “democratically accountable, yet be operationally independent from political influence”.

Mr Acharya is known for his research in theoretical and empirical analysis of systemic risks of the financial sector, its regulation and genesis in government-induced distortions.