of y2k and the extraordinarily low cost of equity capital available to many firms. nonetheless, if the recent more - favorable economic developments gather momentum, uncertainties will diminish, risk premiums will fall, and the pace of capital investment embodying new technologies will increase. even a subdued recovery beginning soon would constitute a truly remarkable performance for the american economy in the face of so severe a decline in equity asset values and an unprecedented blow from terrorists to the foundations of our market systems. for, if the tentative indications that the contraction phase of this business cycle is drawing to a close are ultimately confirmed, we will have experienced a significantly milder downturn than the long history of business cycles would have led us to expect. crucially, the imbalances that triggered the downturn and that could have prolonged this difficult period did not fester. the obvious questions are what has changed in our economy in recent decades to provide such resilience and whether such changes will persist into the future. doubtless, the substantial improvement in the access of business decisionmakers to real - time information has played a key role. thirty years ago, the timeliness of available information varied across companies and industries, often resulting in differences in the speed and magnitude of their responses to changing business conditions. in contrast to the situation that prevails today, businesses did not have real - time data systems that enabled decisionmakers in different enterprises to work from essentially the same set of information. in those earlier years, imbalances were inadvertently allowed to build to such an extent that their inevitable correction engendered significant economic stress. that process of correction and the accompanying economic and financial disruptions too often led to deep and prolonged recessions. today, businesses have large quantities of data available virtually in real time. as a consequence, they address and resolve economic imbalances far more rapidly than in the past. the apparent increased flexibility of the american economy arguably also reflects the extent of deregulation over the past quarter century. certainly, if the energy sector were still in the tight regulatory fetters of the 1970s, our flexibility today would be markedly less. that the collapse of enron barely registered in the relatively recently developed markets for natural gas and electric power was encouraging. although the terrorist attacks hit air travel especially hard over the past few months, deregulation of that industry has demonstrably increased the quantity and flexibility, if not the profitability, of air travel over the past twenty years. truck

duvvuri subbarao : improving financial literacy amongst school children and college students address by dr duvvuri subbarao, governor of the reserve bank of india, at the joint function of the reserve bank of india ( rbi ) and government of karnataka on the financial literacy project in karnataka, bangalore, 22 march 2010. english translation of the governor ’ s address, which was delivered in kannada. * * * respected chief secretary, government of karnataka shri s. v. ranganath and friends, 1. i am delighted to be present here at this function organized jointly by the government of karnataka and the reserve bank of india. over the last one year we have done a number of functions across the country as part of rbis platinum jubilee celebrations. this function this afternoon here in bangalore is easily one of the most exhilarating functions. it was particularly heart warming to listen to children speaking on financial issues. for the first time, i get a feeling we are making a solid start on financial literacy. our hon ’ ble finance minister shri pranab mukherjee and the chief minister of karnataka shri b. yeddyurappa had shown lot of interest to take part in this program. due to some unforeseen urgent works, they were unable to attend this function. however, they have sent their good wishes for the program. 2. when i came here for the reserve bank ’ s central board meeting in may last year, i had an occasion to call on the chief minister, shri yeddyurappa and explained to him the role of responsibilities of the reserve bank. i also told him about the reserve bank ’ s efforts to further financial literacy and financial inclusion. the chief minister showed great interest and requested that we take karnataka as a pilot state for launching our initiatives and offered the full cooperation of the government of karnataka for this purpose. over the last eight months, the reserve bank worked closely with the government of karnataka on several initiatives. today ’ s function is a culmination of these efforts. 3. there are three distinct events we are marking today. ( i ) the first is the release of text books for classes v, vii and ix containing lessons on finance. ( ii ) the second is the launch of the electronic benefit and income transfer ( ebit ) scheme. ( iii ) the third is distribution of prizes to state - wide winners of the rbi quiz competition conducted across schools and colleges of the state of karnataka. 4. let me now say a few words