Question

Crisis Anticipation:

At age 25 you can expect to endure between 5-7 recessions, some with a full blown financial crisis, by the time you reach age 65. Reflect upon how you intend to monitor the financial system and economy going forward.

Answer 1

Usually, there is a business cycle that each economy and hence, financial system faces. If we can figure out what phase we are in, it would be easier to predict when might recession come.

Further, the health of the economy can be predicted by inflation rate, growth rate of the economy and growth rate of various sectors.

To predict the health of financial sector, NPAs should be monitored regularly, with discrepancies in data to be evaluated critically.