rationale, the scope, the limits the objectives and the instruments ought to be clarified to the extent possible since there is a paradigm shift in the role of the financial sector in economic growth and social justice. expectations of public from regulation need to be clearly appreciated and if necessary moderated. at an operational level, arrangement for information exchange and coordination must be put in place and reviewed on a continuous basis. at a legislative level, changes to distinguish owners, regulators and market participants in the financial system are essential. above all, designing and managing all these changes require a combination of political will and professional skill. thank you.

with financial markets, which should admittedly be two - way for optimal results, exclude communication by / with the government? naturally communication by / with the government, by its very nature, will have a differential and, at times, overlapping impact. but how does it affect the independence of the central bank and its policy effectiveness? this dimension poses a challenge for communication policy. third, the education function of central bank communication, that professor blinder referred to, may be more important in emes. in fact, such a function may enlarge the role of a central bank in the emes, when it carries credibility. in this regard, let me quote from an undelivered speech of a distinguished central banker 2 on the subject. “ communication is not just about transparency. it is also about education, guidance and steering things in the right direction. in this, the central bank can be an honest broker between the government and the public and even the parliament. ” in fact, a central bank can influence changes in public policy that are relevant to monetary and financial policies. for example, at the cost of modesty, let me quote mr. tarapore, a respected central banker. " … when the definitive history of india ’ s policy on gold is written up, the speech by dr. y. v. reddy, deputy governor, reserve bank of india, at the world gold council conference on 28 november 1996 will stand out as a watershed as it is perhaps the only speech by a senior indian official which squarely takes on issues on gold policy and it will be appropriately recorded as a forerunner of major policy change ". 3 fourth, relative to many other institutions in the public sector, central banks in many emes happen to have professional skills, experience and objective and independent thinking which can be drawn upon by the government, especially during the process of reform, in particular reforms in the financial sector. structural changes involving institutional and legal changes in emes may need active inputs from the respective central banks. how do theory, practice and expectation of a transparent and independent central bank reconcile with these practical compulsions? fifth, the issue of financial stability is of great significance and enormous complexity for central bankers in the emes. these economies vary considerably with regard to their fiscal, current account, openness to external sector, and dependence on oil - earnings or oil - imports. yet, the analysts in the financial markets often treat them as a group, presumably because the emes are perceived to be high -