Thank God Reserve Bank of India exists…

These are the words said by Dr Subbarao as part of his last speech as RBI Governor.

He says:

There has been a lot of media coverage on policy differences between the government and the Reserve Bank. Gerard Schroeder, the former German Chancellor, once said, “I am often frustrated by the the Bundesbank. But thank God, it exists.” I do hope Finance Minister Chidambaram will one day say, “I am often frustrated by the Reserve Bank, so frustrated that I want to go for a walk, even if I have to walk alone. But thank God, the Reserve Bank exists.”

:-). There is even a better quote on Bundesbank by Jacques Delors, one of the founders of Eurozone:

“Not all Germans believe in God, but they all believe in the Bundesbank.”

So all this fight between RBI and Government (read FM) is pretty much into public space. And if someone like Subba (who is usually very calm) makes such a parting statement one can just imagine how sore the situation was,

An interesting speech overall as Subba defends his policies through the five term, blames the government for all the problems facing Indian economy (wish he had done this a lot more) and the serious questions threatening RBI’s independence and restrcting RBI’s role in Indian economy.

A speech which both Hon’ble FM and RBI’s Governor designate should be reading for different reasons though. FM for perhaps revisiting his stance of targeting RBI most time he has been in power. Or perhaps he might even up the ante..who knows..

Dr Rajan  for understanding what all would be required to save RBI from functioning as an independent institution and look to getting closer to image of Bundesbank…

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