Explained Editor's Note | Too-big-to-fail banks, China’s power play & row over Rahul's remarks

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Dear Express Explained reader,   Amid dramatic back-to-back failures of two mid-sized banks in the United States and the crisis at the major Swiss bank Credit Suisse (including the possibility of takeover by its bigger rival UBS), many in India have been wondering whether their own deposits are safe — especially as concerns continue to be raised about the bad debts and poor health of many Indian banks.   Indeed, how robust is the banking system in India, in particular the domestic systemically important banks (D-SIBs) with significant overseas operations, in the era of startups and digitisation? Are these banks indeed "too big to fail", as is often assumed? George Mathew and Hitesh Vyas answered these questions, explaining in detail the way in which D-SIBs are designated and they operate, and why it is felt necessary — by RBI and other central banks — to have such a system of managing risk in the financial system.   Separately, Anil Sasi wrote specifically about Credit Suisse, whose shares have continued to slide despite the bank having received an emergency $54 billion lifeline from the Swiss National Bank, raising fears of a wider contagion on both sides of the Atlantic. Do read.   Earlier this month, Saudi Arabia and Iran, the two great rivals in the Middle Eastern region, agreed to restore diplomatic relations in a deal brokered by China, an extraordinary development that underlined thickly the relentless increase in the power and heft of Beijing in the new global order — a formidable new actor in a role over which Washington has for decades claimed a monopoly almost as a matter of right. Nirupama Subramanian explained the contours and the implications of this very significant geopolitical change — and the nature of China's ambitious gambit to both secure its long-term economic interests and to lay the ground for exercising lasting political influence in this critical region.   Indian domestic politics meanwhile, has seen lacerating attacks by the BJP on the Congress, with leaders of the ruling party accusing Rahul Gandhi of insulting the nation and its Parliament in speeches and statements made in the United Kingdom. There is an effort to have the MP from Wayanad suspended from Lok Sabha for allegedly breaching its privilege, using the parliamentary mechanism of a special committee that would sit in judgment over the remarks. Liz Mathew wrote about this mechanism and its legal basis, and recalled the earlier occasion on which such a committee had been set up 18 years ago — a time when the Congress was in power and the BJP was in the opposition, and several of its members were in the dock.   Keep reading The Indian Express Explained. Some of our best content is now behind a paywall, so if you haven’t subscribed to The Indian Express yet, it may be a good idea to do so soon. Click here to subscribe. Sincerely,    Monojit   (monojit.majumdar@expressindia.com)    If you received this newsletter as a forward, you can subscribe to it here | Do read our Explained articles here

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