y v reddy : the roadmap for fixed income and derivatives markets inaugural address by dr y v reddy, governor of the reserve bank of india, at the fixed income and money market & derivatives association of indian and primary dealers association of india, mumbai, 11 march 2005. * * * friends, i am thankful to the fixed income money market and derivatives association of india ( fimmda ) and primary dealers association of india ( pdai ), the organisers, for inviting me to deliver the keynote address today. i have had the pleasure of being closely associated with fimmda and pdai since their inception. reserve bank of india has been taking active interest in the development of fixed income markets and the role of fimmda is becoming increasingly important in this regard. it has played a pivotal role in the design of documentation of repos, commercial paper and certificate of deposits, finalising the daily / annual valuation methodology for fixed income securities. rbi consistently seeks its views on various g - sec market related issues. it is also involved in standardisation of market practices for fixed income securities / money market instruments / fixed income derivatives. it has been emphasising the importance of best practices in the otc interest rate derivatives market and has circulated a guidance note for best practices to its members in this regard. we, in the rbi, understand the need for continued collaborative relationship with fimmda and pdai. it is in this spirit that i look forward to the deliberations today in the sixth annual conference being organised jointly by fimmda and pdai. i am somewhat reluctant to elaborate on the subject of the day, namely, the road map of fixed income and derivatives market, in my keynote address for several reasons. my views in this regard were articulated in a seminar and then published in a bis paper titled “ issues and challenges in the development of the debt market in india ”. the subject was subsequently updated, elaborated and improved upon comprehensively by my friend and former colleague dr. rakesh mohan, when he addressed this gathering last year in dubai. dr. mohan has already indicated the “ road ahead ”, which i fully endorse. moreover, one should wait for free and frank discussion on the subject in this conference, in which distinguished persons with several perspectives are participating. let me assure you that we in rbi do look forward to the deliberations of this conference and the suggestions made will be, to the extent possible, examined by the various technical groups in the rbi that

quality of education below the college level. to be sure, substantial reforms in math and science education have been under way for some time, and i am encouraged that policymakers, educators and the business community recognize the significant contribution that a stronger elementary and secondary education system will make in boosting the potential productivity of new generations of workers. i hope that we will see that the efforts to date have paid off in raising the achievement of us students when the results of the 1998 - 99 international comparisons for eighth graders are published. whatever the outcome, the pressures to advance our education system will continue to be intense. as the conceptual share of the value added in our economic processes expands further, the ability to think abstractly will be increasingly important across a broad range of professions. critical awareness and the abilities to hypothesize, to interpret and to communicate are essential elements of successful innovation in a conceptual - based economy. as with many skills, such learning is most effective when it is begun at an early age. and most educators believe that exposure to a wide range of subjects - including literature, music, art and languages - plays a considerable role in fostering the development of these skills. as you know, school districts are also being challenged to evaluate how new information technologies can be best employed in their curricula. unfortunately, this goal has too often been narrowly interpreted as teaching students how to type on the computer or permitting students to research projects over the internet. incorporating new technologies into the educational process is indeed likely to be an important element in improving our schools, but it must involve more than simply wiring the classroom. human capital - in the form of our teachers - and technology are complements in producing education output just as they are in other business activities. to achieve the most effective outcome from new technologies, we must provide teachers with the necessary training to use them effectively and to provide forums for teachers and education researchers to share ideas and approaches on how best to integrate technology into the curriculum. and we must create partnerships among the states, the school systems, labor and industry to develop appropriate standards and guidelines for the teaching of information technology in the classroom. a crucial concern today - and i know that the national governors ’ association is working hard to address this issue - is that the supply of qualified teachers will be insufficient to meet the demand. indeed, a substantial number of teachers are scheduled to retire over the next decade, and how to replace them and meet the additional demand from rising enrollments is certain to be a