India and the Global Financial Crisis: Managing Money and Finance

by Y. V. Reddy

Overview

‘India and the Global Financial Crisis’ offers a collection of essays based on the speeches delivered by Reddy during his tenure as Governor of the Reserve Bank of India between September 2003 and September 2008, a period of rapid growth for the Indian economy as well as extraordinary challenges for the conduct of monetary policy. The volume describes India's financial situation in light of the perspectives and policies of the Reserve Bank of India, as well as its response to the financial crises in 2007.

Product Details

ISBN-13:	9781843318835
Publisher:	Anthem Press
Publication date:	01/01/2010
Series:	Anthem South Asian Studies
Pages:	413
Product dimensions:	5.50(w) x 8.50(h) x 1.00(d)

About the Author

Y. V. Reddy served as Governor of the Reserve Bank of India from 2003 to 2008. Prior to being the Governor, he was Executive Director for India, Sri Lanka, Bangladesh and Bhutan at the International Monetary Fund. He is currently Emeritus Professor at the University of Hyderabad.

Table of Contents

List of Abbreviations xi

Acknowledgements xv

Introduction 1

I Indian Economy: Review and Prospects

1 India and the Global Economy 41

2 Importance of Productivity in India 65

3 Reflections on India's Economic Development 82

4 India: Development and Reform Experience, and Prospects 96

II Financial-Sector Reforms

5 Reforming India's Financial Sector: Changing Dimensions and Emerging Issues 121

6 Global Financial Turbulence and the Financial Sector in India: A Practitioner's Perspective 135

7 Rural Credit: Status and Agenda 154

III Banking-Sector Reforms

8 Banking-Sector Reforms in India: An Overview 161

9 Micro-Finance: RBI's Approach 174

10 Rural Banking: Review and Prospects 185

IV Monetary Policy in a Globalising World

11 Monetary Policy: An. Outline 195

12 Globalisation of Monetary Policy and the Indian Experience 204

13 Monetary and Regulatory Policies: How to Get the Balance with Markets Right 212

V Organisation and Communication Policies of the RBI

14 Central Bank Communications: Some Random Thoughts 219

15 What RBI Means to the Common Person 227

16 Organisation and Functioning of the RBI 234

17 The Virtues and Vices of Talking About Monetary Policy: Some Comments 246

VI Managing Capital Account Liberalisation

18 Foreign Exchange Reserves: New Realities and Options 261

19 Management of the Capital Account in India: Some Perspectives 273

20 Government-owned Investment Vehicles and Capital Flows: Indian Perspective 286

VII Global Financial Imbalances and Crisis

21 Implications of Global Financial Imbalances for EMEs 299

22 Global Imbalances: An Indian Perspective 313

23 Globalisation, Money and Finance: Uncertainties and Dilemmas 328

Epilogue: The Global Financial Crisis and India 339

Select Bibliography 371

Index 381

What People are Saying About This

From the Publisher

'Dr Reddy was called the Guru by all of us on the board of the RBI because of his extraordinary ability to explain complex macroeconomic concepts in simple words.' —N.R. Narayana Murthy, Chairman of the Board and Chief Mentor, Infosys Technologies Limited

'Y. V. Reddy has brilliantly managed to balance growth imperatives with stability. This he has done using his enormous technical expertise in the areas of monetary policy and applying it judiciously to a growth environment as seen in India. His approach and policies have stood the test, as the world has seen the financial crisis and its consequences unfold over the last one year.' —K.V. Kamath, Chairman of the Board of ICICI Bank

'At a time when the financial crisis rocked the global economy and banks around the world have seen their capital bases melt away, Indian banks and other financial institutions remain in excellent health. The credit for this largely goes to the foresight of one man: Dr Yaga Venugopal Reddy.' —Arvind Panagariya, Professor of Economics, Columbia University

Editorial Reviews

'If America had a central bank chief like Y.  V. Reddy, the US economy would not have been in such a mess.' —Joseph E. Stiglitz, Professor of Economics at Columbia University and Nobel Laureate, to NDTV

'Of all the central bankers I have encountered in recent years...Reddy of the RBI stands out for his perceptive warnings about the mounting perils in unbalanced asset markets and the real economy.' —Stephen Roach, Chairman of Morgan Stanley Asia, in 'Bloomberg Markets'

'To our knowledge [Dr Reddy] was the only governer of a major central bank who (a) paid any attention to money and credit growth; (b) understood that asset prices play a signalling role in the economy; and (c) applied differential risk-weighting to potentially troublesome sectors well in advance of serious overheating.' —Jim Walker, Founder and Managing Director of Asianomics Limited, in 'Asianomics'

'There is no doubt in my mind that had it not been for the deft handling by Reddy, India could have been a mini version of Iceland, with the economy buckling under overseas borrowing by Indian companies.' —Rajeev Malik, Economist at Macquarie Capital Securities, in 'Financial Times'

From the Publisher