Nocera (NYT): "How India Avoided a Crisis"

Nocera is almost always worth reading, and now he's writing from Mumbai. My father-in-law pointed this one out--yesterday's column: on how India largely avoided the subprime/credit crisis.

How India Avoided a Crisis

In India, banks usually don't lend money to people who lack the means to pay it back. Any lessons to be learned, class?

December 20, 2008

Some of the factors Nocera describes are cultural, but the bulk of the essay (the 2nd more substantive half) is all about India's central bank/er:

"India had a bank regulator who was the anti-Greenspan. His name was Dr. V. Y. Reddy, and he was the governor of the Reserve Bank of India...in the irascible Mr. Reddy, who took office in 2003 and stepped down this past September, it had exactly the right man in the right job at the right time."

and at the end:

"Our regulators, unlike theirs, just stood by and let it happen. The next time we're moving into bubble territory, perhaps we can take a page from Mr. Reddy's book — sometimes it's better to apply the brakes too early than too late. Or, as was the case with Mr. Greenspan, not at all.

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None of this is to say that the global credit crisis hasn't affected India. It certainly has. I'll be back after the holidays with more columns from India, including how Sept. 15 — the day Lehman Brothers defaulted — changed everything, even here, on the other side of the world."

Certainly looking forward to that..