Rajan questions merit of low rates

The new head of India’s central bank is questioning whether current ultra-low interest rates are the right way to return to growth after the financial crisis.

Raghuram Rajan, the head of the Reserve Bank of India, says central banks warded off a collapse of the financial system through bank bailouts and other rate cuts.

But global growth has underperformed and Mr. Rajan said it was time to ask if there were better tools than rock bottom rates such as unemployment insurance and targeted relief for people in debt.

At a speech in Frankfurt, Rajan asked “are ultra low rates the solution or part of the problem?”