Duvvuri Subbarao: Global financial crisis - questioning the questions
Text of the JRD Tata Memorial Lecture by Dr Duvvuri Subbarao, Governor of the Reserve
Bank of India, at the meeting of The Associated Chambers of Commerce and Industry of
India, New Delhi, 31 July 2009.
* * *
JRD Tata
Thank you for inviting me to deliver this year's JRD Tata Memorial Lecture. It is an honour to
which I attach a lot of value. The man whose life this series of lectures commemorates, JRD
Tata - or JRD, as he was known - left a great legacy as a visionary, as an industry leader,
as a philanthropist, and above all as a humanist.
Two words capture JRD's lasting contribution, nation builder. His commitment to India's
development was deep and abiding, and he was passionate about improving the lot of the
less privileged. S.A. Sabavala, one of JRD's long-time associates, tells a story that illustrates
this passion. After picking up Mother Teresa in Jamshedpur once, JRD spoke generally
about poverty in India, how it upset him, when it would end and so on. Her reply, "Mr. Tata,
your job is to open more industries, give more employment to people, and leave the rest to
God."
JRD evidently took the Mother's advice to heart. Starting with 14 enterprises at the start of
his business career, JRD retired in 1988 with a conglomerate of 95 enterprises that provided
steady employment to hundreds of thousands. Tata businesses ranged from airlines to
hotels, trucks to locomotives, heavy chemicals to pharmaceuticals and financial services, tea
and air conditioning, becoming a household name.
We in the Reserve Bank of India (RBI) are proud of a special connection with JRD. He was a
Director on the RBI's Central Board for three terms - from 1952 to 1964. There are countless
stories about JRD's humanism, determination, old world charm and everyday courtesies. The
Reserve Bank has its own share. I will share one quick anecdote that sums up the measure
of this remarkable man. RBI board meetings at that time were held on the first floor in the old
building. When meetings would break around lunch time, JRD would join the line of RBI
staffers waiting to take the elevator. JRD always insisted that the staff go ahead of him,
telling the lift man: "These boys are hungry, and they have to eat and then come back to
work. Please drop them off first." Old timers of RBI, almost all of them now retired, recall
several occasions when JRD showed unaffected empathy.
There is a similar fount of stories about JRD's visionary leadership in tough times, and his
astute understanding of what could drive the future, and how to always keep ahead of the
curve. He was a good listener, but he always asked penetrating and insightful questions,
questioning even the questions that others asked.
Today we pay tribute to that amazing individual, a Bharat Ratna, and his rare capability to
question the questions. Very often, asking the right question is even more important even
than having the right answer. JRD's insights underpin my speech today: I will question the
questions that people are asking about the financial crisis, its impact and our approach to
recovery.
The global crisis
We are going through what is by all accounts the deepest economic crisis of our time.
Economic historians are comparing this crisis to the Great Depression of the 1930s. Both
were global in scope, both were centred in the United States, and importantly both were
preceded by mounting global imbalances, loose monetary policy and high levels of leverage.
Still, there are important differences between the Great Recession of today and the Great
Depression and all the crises in between. A number of regions of the world - Latin America
and Asia - and a number of individual countries such as Argentina, Mexico, Russia, Turkey -
had all gone through crises, and these crises were essentially traditional retail banking and
currency crises. During these crises richer countries buffered the fall bailing out the troubled
regions. In contrast, the current crisis hit at the very heart of global finance with no buffer to
fall back on. Some studies suggest that the net worth impact of this crisis, when measured by
variables such as declines in output, trade volumes and stock markets, has arguably been
more severe than that of the Great Depression.
Every country in every part of the world has been affected by the crisis, although through
different channels and to different degrees. The United States and Europe, which had
become dependent on the financial sector as their engine of growth, were at the very
epicentre of the crisis. Export growth led Asia, which managed its external sector cautiously
after the Asian Crisis of a decade ago, saw its growth plummet through a sharp decline in the
demand for exports. Over the years, Eastern Europe had become dependent on large-scale
capital imports through banking channels and was therefore hit by the reversal of capital
flows. African and South American economies suffered through the huge drop in commodity
prices and deterioration in their terms of trade. In India, our financial markets continued to
function normally, and our financial sector remained healthy. Even so, we too were hit by
sudden capital flow reversals as part of the global deleveraging process and the liquidity
hiccups transmitted mainly through the confidence channel.
The point here is that almost every country around the world has been impacted by this
crisis.
Text book economics tells us that stresses in non-tradable sectors remain confined to
economic boundaries. Many text books also cite housing as a quintessential example of a
non-tradable good. It is paradoxical therefore that a problem that, at some level, traces its
origins to pressures in the US sub-prime housing market should snowball into a crisis of such
global dimensions. This only demonstrates the power of globalization, which is now
increasingly encompassing sectors long considered non-tradable through growing
communication linkages, capital flows and the depth of financial engineering - three aspects
that lie at the heart of this crisis.
A lot is being written about how this crisis is too important to waste, how we should learn the
lessons of this crisis and go forward with Schumpeterian creative destruction. Some people
have, however, questioned the wisdom of drawing lessons when the immediate challenge is
to pull the world economy out of its tailspin. When Chairman Mao was asked what he thought
of the French Revolution, he said it was too early to say. People who take a long view of
history as did Chairman Mao would say that it is too premature to talk about the lessons of
the crisis. Of course, this crisis is by no means over. There may yet be surprises. So, is it too
early to raise questions?
I believe it is not. The world is changing too rapidly to allow us the luxury of sitting back until
after the crisis has passed to investigate its causes and draw key lessons. Indeed the
situation is so complex, compelling and urgent that we cannot effectively resolve it unless we
start looking at everything de novo.
This crisis has also been an intellectual challenge. It has thrown up a number of issues that
we believed were behind us, reopened questions that we thought were answered, renewed
debates that we had assumed were settled and attacked stereotype views that we had
accepted without questioning. Out of all this churning, lessons are being drawn and applied
to policy and institutional reform. While this earnestness is welcome, there is a risk that we
may be learning the wrong lessons because we are asking the wrong questions. That we
need to ask the right question to get the right answers is self evident, even tautological. What
I propose to do therefore in my lecture today is to question the questions in four crisis related
areas addressing them in the global context and the Indian context.
Global imbalances
The first issue relates to global imbalances. No crisis as complex as this has a simple or a
single cause. In popular perception, the collapse of Lehman Brothers in mid-September 2008
will remain marked as the trigger of the crisis. At one level that may well be true. Indeed, I
can visualize future text books in finance dividing the world into "before Lehman" and "after
Lehman". But if we probe deeper, we will learn that at the heart of the crisis were two root
causes - the build up of global imbalances and developments in the financial markets over
the last two decades. And received wisdom today is that these two root causes are
interconnected, and that financial market developments were in a sense driven by the global
imbalances.
Global macro imbalances got built up because of the large savings and current account
surpluses in China and much of Asia in wake of the East Asian Crisis a decade ago. These
were mirrored by large increases in leveraged consumption and current account deficits in
the US. In short, Asia produced and America consumed. There is a raging debate on what
was the cause, and what the effect - the US consumption boom and the Asian savings glut?
Regardless, the bottom line is that one was simply the mirror of the other and the two share a
symbiotic relationship.
And how did these imbalances build up? The answer lies in globalization - globalization of
trade, of labour and of finance. The world witnessed a phenomenal expansion in global trade
over the last 50 years; global trade as a proportion of global GDP more than doubled from 24
per cent in 1960 to 57 per cent in 2006, just before the crisis hit us. Globalization of finance
was even more prolific, especially over the last decade. For the world taken together, the
ratio of foreign assets and foreign liabilities to GDP rose from 45 per cent in 1970 to over 300
per cent in 2004.1 The impact of globalization of labour was by far more striking. Emerging
Asia added nearly three billion to the world's pool of labour as it integrated with the rest of the
world over the last two decades thus hugely improving its comparative advantage. Together
the three dimensions of globalization - trade, finance and labour - helped emerging Asia
multiply by a factor its exports to the advanced economies. The result was large and
persistent current account surpluses in the Asian economies and corresponding current
account deficits in the importing advanced economies.
The chain of causation from these imbalances to the financial crisis is interesting although
not obvious. As Asia accumulated savings and simultaneously maintained competitive
exchange rates, the savings turned into central bank reserves. Central banks, in turn,
invested these savings not in any large, diversified portfolio but in government bonds of the
advanced economies. This in turn drove down risk free real interest rates to historically low
levels triggering phenomenal credit expansion and dropping of the guard on credit standards,
erosion of credit quality and search for yield, all of which combined to brew the crisis to its
explosive dimensions.
Where did India stand in all this? India did not contribute to global imbalances. Indeed we ran
current account deficits for the last two decades except for a brief period during 2001-04. In
other words, we imported savings, did not export them. However, India's integration with the
rest of the world over the last decade has been remarkably rapid. First, let us look at trade
integration. The two way trade (merchandize exports plus imports) as a proportion of GDP
doubled from 20 per cent in 1998/99, just after the Asian crisis, to 41 per cent in 2008/09.
Our financial integration was even deeper as measured by the proportion of total external
transactions (gross current flows plus gross capital flows) to GDP. This ratio much more than
doubled from 44 per cent in 1998/99 to 112 per cent in 2008/09. While the crisis transmitted
to India through both the trade and finance channels, the latter was by far more significant in
terms of the intensity of impact.
Notwithstanding reams being written about resolving the present crisis and preventing
another like this, global imbalances are not on the radar screen of policy debate. This is both
perplexing and disturbing. Indeed, once the immediacy of the crisis is behind us, it will not be
surprising if we head for another round of destabilizing global imbalances.
How do we manage global imbalances? It is argued that if the US Fed had refused to supply
the incipient demand for liquidity in the late 1990s and early 2000s, higher interest rates
could have prevented the borrowing boom and the follow on widespread deterioration of
financial standards and the subsequent melt down. But this also would have meant lower
growth in the US and the rest of the world. The short point is that even as macroeconomic
imbalances should not be allowed to proliferate, it is necessary to balance the need for global
economic growth against the disruptions which follow the unwinding of such imbalances.
Resolving the problem of global imbalances does not mean eliminating them. As long as
there is world trade, certain countries will have surpluses and certain others will run deficits.
Global imbalances have been, are, and will continue to be inevitable.
So, to ask how we can eliminate global imbalances is clearly the wrong question. The right
question is this: given that global imbalances are inevitable, how do we ensure that they do
not build up to destabilizing levels?
Monetary & fiscal policy
The second issue on questioning the questions relates to monetary and fiscal policy.
Unnerved by the scale and sweep of the crisis, governments and central banks around the
world responded with an unprecedented show of policy force. The size and pace of monetary
and fiscal expansion raised a paradoxical situation - even as governments and central banks
coordinated and cooperated, many of their familiar conflicts got played out once again.
Central banks reduced policy rates ferociously, and in many advanced countries the rates
are at or near zero. This is the standard tool of monetary policy whereby central banks
expect to influence interest rates at the long end, and steer financial conditions and hence
the entire economy by adjusting the short term rates. Even in normal times, monetary policy
transmission is lagged. In the crisis situation, because of the fear and uncertainty in the
financial markets, it almost totally lost traction. Central banks responded to this alarming
impasse through a slew of measures variously described as quantitative and credit easing.
It soon became clear that even as monetary policy became the first line of defence and
central banks turned lenders of first resort, credit markets were in no mood to revive soon.
So, governments had to step in with huge fiscal packages to stimulate domestic demand and
to recapitalize banks.
Fiscal deficits have ballooned around the world to levels never seen in peace time. In the US,
the fiscal deficit (general government balance) is projected to rise from 2.2 per cent in 2006
to 13.6 per cent in 2009; in the UK, from 2.6 per cent (2006) to 10.9 per cent (2010); and, in
the euro area, from 1.2 per cent (2006) to 6.1 per cent (2010). Public debt of the ten leading
rich countries is projected to jump from 78 per cent in 2007 to 106 per cent in 2010 and
further to 114 per cent in 2014. "We are all Keynesians now", as President Nixon once
remarked.
Financing these fiscal deficits has not been a problem so far. The extreme risk aversion in
the wake of the crisis triggered "flight to safety" and "flight to liquidity" which, in turn, ensured
that there was enough appetite for treasuries. Even so, yields on treasuries have started
firming up in recent weeks suggesting the return of some risk appetite. Central banks are
showing extraordinary monetary accommodation by pumping in huge amounts of liquidity to
support banks and financial institutions. This has willy-nilly helped governments raise
borrowings.
Governments are likely to be forced to pay back for this support. Central banks' balance
sheets have expanded at a furious pace. The US Fed balance sheet, for example, expanded
from $919 billion at end June 2008 to $2 trillion by end June 2009. The reserves of banks
with the Fed jumped twenty times from less than $33 billion as at end June 2008 to $661
billion by end June 2009. Should the central bank's interest income fall short of its interest
payment obligations, it will have to fall back on fiscal support for interest payments, reversing
the dependency equation between the government and the central bank.
Many believe that these tensions between fiscal and monetary policy are temporary, and will
melt away once the crisis has passed. That is unlikely to be the case. On the contrary, fiscal
deficits in advanced economies are likely to persist, and in fact, increase on the way forward
for at least two reasons. First, since it will take some years for households to rebuild their
balance sheets which got ruptured by the crisis, economic growth will likely be weak for
some years necessitating big fiscal deficits. Even so, since this deficit will be of a cyclical
nature, it can possibly be managed. However, the second and a bigger fiscal concern stems
from the demographic profile of the advanced economies. As more people age, dependency
ratios increase and social security payments mount, governments will have to resort to big
deficits on a long term basis to meet these obligations. Moreover if the surplus Asian
economies make the necessary adjustment, they will move away from funding the fiscal
deficits of advanced economies. In other words, monetary policy will have to be conducted in
a regime of large and continuing structural fiscal deficits.
How are the tensions between fiscal and monetary policies playing out in India? Here, even
as the Government and the Reserve Bank coordinated their crisis management efforts, there
are dilemmas. Last year (2008/09), the government launched three fiscal stimulus packages
which came on top of an already announced expanded safety-net programme for the rural
poor, the farm loan waiver package and pay out following the implementation of the Sixth
Pay Commission. Together all these commitments raised the fiscal deficit from 2.5 per cent
estimated in the budget to 6.2 per cent (as per pre-actual figures) by the close of the year.
The budget for 2009/10 projects a fiscal deficit of 6.8 per cent of GDP.
For its part, the Reserve Bank sharply reversed its monetary stance from tightening to easing
following the full outbreak of the crisis in September 2008. The monetary stimulus came
through a sharp reduction in the policy interest rates and the cash reserve ratio (CRR),
reduced pre-emption of bank resources through the statutory liquidity ratio (SLR) and
expansion of refinance facilities for banks some of which were sector specific. The potential
liquidity made available by the Reserve Bank as a result of these measures amounted to
Rs.560,000 crores, nearly 9 per cent of GDP.
The countercyclical spending by the government and the accommodative monetary policy of
the Reserve Bank were both necessary in order to cushion the economy from the onslaught
of the crisis. Nevertheless, the sudden and rapid expansion of government borrowing
programme has impeded monetary transmission. Last year, the final net government
borrowing was two and a half times the original budget estimate. This year's budgeted
borrowing is going to be at least a third higher than that. The intent behind Reserve Bank's
monetary easing was to encourage banks to reduce lending rates and maintain the flow of
credit to the productive sectors. But government borrowing had resulted in firming up of
yields, notwithstanding the substantial excess liquidity, militating against the low interest rate
regime that we want.
The huge government borrowing programme demanded active liquidity management by the
Reserve Bank, and we responded by way of open market operations (OMO). For the first
time we put out the programme for the OMO along with the programme for borrowing so as
to reduce uncertainty and infuse confidence in the market. This year again, the Reserve
Bank will have to manage the delicate balance between government borrowing and
maintaining ample liquidity to meet the demand for private credit as it picks up in the months
ahead. We will follow the same open, transparent and consultative process as we did last
year.
Going forward, we need to tread the balance between short term compulsions and medium
term sustainability with care and good judgement. In the short term, the countercyclical public
spending was necessary; the important point here is to spend that money quickly, effectively
and to create durable assets. On the monetary side, the increased fiscal deficit is going to
pose more than a proportionate challenge. Creation of high power money in the face of large
fiscal deficits, even if there is no direct primary financing, is not costless; it can sow the seeds
of the next inflationary cycle. The challenge for the Reserve Bank is to maintain a
comfortable liquidity situation while at the same time anchoring inflation expectations.
The current monetary and fiscal stance is, however, not the steady state. The Reserve Bank
needs to roll back the special monetary accommodation. For this to happen, there are two
necessary conditions. First, the government will have to show a firm and credible
commitment to fiscal responsibility by fleshing out the road map for fiscal consolidation.
Second, there will have to be more definite signs of recovery. The Reserve Bank will
maintain an accommodative stance until demand conditions improve and credit flow takes
hold, but reversing the expansionary policies is definitely on the agenda on the way forward.
Having explained the Indian context in some detail, let me now return to the global scene.
The seventy odd years since the Great Depression saw a famous rivalry between fiscal and
monetary policies for influence. The crisis has shown that both are required, and that indeed
both are critical for macroeconomic stabilization. It is unlikely that we will revert to status quo
ante once the crisis has passed. On the contrary, there will need to be increasing
coordination between monetary and fiscal policies. Central banks will have to take into
account fiscal compulsions in their monetary stance while governments will need to commit
to strict fiscal responsibility. To ask therefore how monetary and fiscal policies can go their
separate ways is the wrong question. What is the right question? I submit the right question
is: how can we coordinate fiscal and monetary policies to achieve the planned outcomes?
Inflation targetting
I will now move to the third issue - inflation targetting. In the years leading to the crisis,
central bankers had nearly declared victory. They had found the holy grail of stable growth,
low inflation and low unemployment through a rule based monetary policy that targeted
inflation rather than monetary aggregates. The much celebrated Great Moderation had
delivered.
The crisis at once hurt the central bankers' pride and shattered their confidence as the Great
Moderation unravelled. Monetary policy was found wanting in delivering financial stability.
The undoing was the reluctance or failure of central banks to acknowledge increasing asset
prices.
The monetary stance of studied indifference to asset price inflation stemmed from the now
notoriously famous Greenspan orthodoxy which can be summarized as follows. First, asset
price bubbles are hard to identify on a real time basis, and the fundamental factors that drive
asset prices are not directly observable. Second, monetary policy is too blunt an instrument
to counteract asset price booms. And third, a central bank cannot presume to know more
than the market. The surmise therefore was that the cost-benefit calculus of a more activist
monetary stance of "leaning against the wind" was clearly negative. It is more cost effective
for monetary policy to wait for the bubble to burst and clean up afterwards rather than prick
the bubble in advance.
The Great Unravelling has, however, shattered the intellectual consensus around both
inflation targeting and the Greenspan orthodoxy on asset price build up. The crisis has made
two things clear. First, the policy of benign neglect of asset price build up has failed. Second,
price stability does not necessarily deliver financial stability.
Where do we in India stand on inflation targetting? Over the last few years, there has been
an animated debate in India on inflation targeting fuelled by two influential studies, one by
Percy Mistry and the other by Raghuram Rajan. While Mistry strongly urged that the gold
standard for stabilizing monetary policy is a transparent, independent, inflation-targetting
central bank, Rajan held that reorienting RBI towards inflation targetting will have to dovetail
with the government's commitment to maintain fiscal discipline and not hold the central bank
accountable for either the level or the volatility of the nominal exchange rate.
The debate on inflation targetting in India has to some extent been overtaken by the
learnings from the crisis. Nevertheless, it is worthwhile noting that inflation targetting is
neither desirable nor practical in India for a variety of reasons. I will defer a detailed
exposition on this issue to another forum; I will allude here only to the important reasons.
•
First, it is inconceivable that in an emerging economy like India, the central bank can
drive a single goal oblivious of the larger development context. The Reserve Bank
must be guided simultaneously by the objectives of price stability, financial stability
and growth.
•
Second, food items which have a large weight (46-70 per cent) in the various
consumer prices indices are vulnerable to large supply shocks, especially because of
the vagaries of the monsoon, and are therefore beyond the pale of monetary policy.
An inflation targeting RBI cannot do much to tame a supply driven inflation except as
a line of defence in an extreme situation.
•
Third, which inflation index do we target? In India, we have one wholesale price index
and four consumer price indices. There are ongoing efforts at a technical level to
reduce the number of consumer price indices, and I believe the technical issues are
not insurmountable. But that still will not give us a single representative inflation rate
for an emerging market economy with market imperfections, diverse geography and
1.1 billion people.
•
Fourth, the monetary transmission mechanism in India is impeded because of the
large fiscal deficits, persistence of administered interest rates and illiquid private bond
markets. Inflation targetting can be efficient and effective only after monetary
transmission becomes streamlined.
•
Finally, we need to manage the monetary fall-out of volatile capital flows that queer
the pitch for a single focus monetary policy. A boom-bust pattern of capital flows can
lead to large disorderly movements in exchange rates rendering both inflation
targeting and financial stability vulnerable. Like other emerging economies, India too
will have to navigate the impossible trinity as best as it can.
In a more global context, given the fall out from the crisis, to ask how central banks should
revert to their sole inflation targeting mandate is the wrong question. The right question is
this: what are the specific roles and responsibilities of governments and central banks in
ensuring price stability, financial stability and macroeconomic stability?
Real sector and financial sector
Finally, I want to address questions around the interplay between the real sector and the
financial sector. One of the silent, albeit influential, developments leading to the crisis was
the hubris that came to surround the financial sector. There were two factors behind the
financial sector's growth in size, importance, and influence. The first was the ferocious
search for yield, engendered by the easy liquidity in the global system that triggered a wave
of financial innovation. Complex financial products were created by slicing and dicing,
structuring and hedging, originating and distributing, all under the belief that real value could
be created by sheer financial engineering. The second factor was the razzle dazzle of
sophisticated maths applied to financial modelling. The premium was not on models that
captured the structural properties of the market but rather on models that best fitted market
prices, never mind if those prices were way out of line on any fundamental analysis.
In the world that existed before the crisis - a benign global environment of easy liquidity,
stable growth and low inflation - profits kept coming, and everyone got lulled into a false
sense of security in the firm belief that profits will keep rolling in forever. Herb Stein, an
economist, pointed out the truism that, "if something cannot go on for ever, it will eventually
stop." But no one paid attention. Indeed, as Chuck Prince, the former Chief of Citigroup said,
it was necessary to keep dancing as along as the music was on. The magic of the financial
sector gave it such a larger than life profile that we began to believe that for every real life
problem, no matter how complex, there is a financial sector solution. Now, of course, we
know better - for every real life problem, no matter how complex, there is a financial sector
solution, which is wrong.
Take the case of the United States. Over the last 50 years, the share of value added from
manufacturing in GDP shrank by more than half from 25.3 per cent to 11.5 per cent while the
share of financial sector more than doubled from 3.6 per cent to 7.5 per cent. The job share
of the manufacturing sector declined by more than half from 28.5 per cent to 10.5 per cent
while the job share of the financial sector increased by over a third from 3.5 per cent to 4.6
per cent. The same trend is reflected in profits too. Over the last 50 years, the share of
manufacturing sector profits in total profits declined by more than half from 49.3 per cent to
20.6 per cent while the share of profits of the financial sector increased by more than half
from 17.4 per cent to 26.6 per cent. Clearly, the excessive risk-taking behaviour of the
financial sector raised the value-added of the sector beyond a sustainable level making the
melt down, in retrospect, inevitable.
Forgotten in the euphoria of financial alchemy is the basic tenet that the financial sector has
no standing of its own; it derives its strength and resilience from the real economy. It is the
real sector that should drive the financial sector, not the other way round.
This thought is also a convenient place to introduce my last point, namely financial sector
regulations. In the coming months and years, how the world regulates the financial sector will
change dramatically. The US, for example, has already put out a framework that charts
significant changes from the existing model of financial regulation.
In India, we too will have to address this issue sooner or later. However, our problem is a
little different since we must regulate markets in a way that does not hamper development.
But whose development do we focus on? As I have argued, what is important is the
development of the real sectors not of the financial sector. To the extent that the financial
sector helps deliver stronger and more secure long-term growth, its development is
important. And our regulatory framework should be premised on this underlying argument.
So, as we change or review our regulatory framework, the question we need to answer is
whether an existing practice or a change in rule delivers higher and more secure real
economy growth; not whether it develops the financial sector or accelerates its expansion.
All in all, this crisis has dealt a harsh blow to our confidence in the financial sector. But are
we asking the right question? The question we are asking is how to put the financial sector
back on the high growth trajectory. I believe we must be asking a different question, so that
we can come up with effective and lasting solutions. That question is: how can we keep real
sector growth on a high trajectory? And only in this connection, should we ask what the
financial sector can do to help.
Conclusion
That brings me to the conclusion of my lecture. To summarize, I have argued that in order to
learn and apply the right lessons from the crisis we must, in the spirit of the man whose
legacy we honour today, question the questions. I am conscious that the list of issues I have
chosen is by no means comprehensive. Expanding that list