YV Reddy is the former Governor and D Subbarao, the current Governor of the Reserve Bank of India
On YV Reddy’s second book on the economic crisis
“publishing books on crisis is a minor growth industry.”
On what being a central bank governor means
Mr. Subbarao said. “I go to some international meetings and the consensus is that if you are a good, virtuous God-fearing economist, you are born as a central banker in an emerging economy. If you are a wicked economist, you are condemned to manage a central bank in a developed economy.”
On the relationship between the executive and the central bank…
“There was once a common friend of Dr. Reddy’s and mine, sitting in his office when he was governor. Dr. Reddy’s phone rang and the friend could hear only one side of the conversation which went like this—Dr. Reddy kept saying ‘No, no, no, no, no, yes, no, no, no.’”
Mr. Subbarao continued: “At the end of the conversation, the common friend asked what was this about? Dr. Reddy said ‘The finance minister was asking me to do all these things and I would say no.’ The friend then asked what was this ‘yes’ about? And Dr. Reddy said ‘The finance minister asked me if I was able to hear him!’”
Wait, is the central bank really independent?
“I say, ‘Yes. I have the permission of the government of India to say so,’” he said.