made significant contributions to the formulation and implementation of the country ’ s first and second five year plans. he was instrumental in the enactment of new companies act and nationalisation of the imperial bank of india and life insurance companies. after resignation from union cabinet he worked as chairman of ugc during 1956 to 1961 and vice - chancellor of university of delhi from 1962 to 1967. in 1975, he was bestowed with the padma vibhushan award. he was also a co - recipient of the prestigious ramon magsaysay award in 1959 for distinguished government service. 5. for this year ’ s memorial lecture in honour of shri c. d. deshmukh, it is our pleasure to have mr. agustin carstens with us. he was the governor of the central bank of mexico from 2010 to 2017 and a member of the bis board from 2011 to 2017. as a bis board member, he chaired the global economy meetings and the meetings of economic consultative council. he also headed the international monetary and financial committee, the imf ’ s policy advisory committee for two years. 6. mr. carstens began his career at the bank of mexico in 1980, where he has worked in various capacities. he later served as mexico ’ s deputy finance minister and as deputy managing director at the imf. he was mexico ’ s finance minister from 2006 to 2009. he has also been a member of the financial stability board since 2010 and is a member of the group of thirty. 7. mr. carstens holds a doctoral degree in economics from university of chicago and has extensive research experience in the field of macroeconomic issues and finance. his work on ‘ latin american central bank reform : progress and challenges ’, which takes stock of the 1 / 2 bis central bankers'speeches institutional reforms of monetary policy in latin america since the early 1990s, was widely acknowledged. 8. today, mr. carstens will speak on “ central banking and innovation : partners in the quest for financial inclusion ”, – a topic which could easily be the most relevant at the current juncture. the recent emergence of fintech or digital innovations in finance is potentially a strong transformative force to shape the financial sector globally. a great benefit of these technological developments is the scope to expand financial outreach in a cost effective manner. at the same time, however, there are regulatory and supervisory challenges which the central banks across the globe need to address. 9. the reserve bank is committed to promote and deepen the cause of financial inclusion in india

on those markets may also exist. but their number will depend on the basket of deliverables of the futures contracts and how those baskets are defined. the alternative would be for a group of different countries ’ bonds to be traded interchangeably, but that seems an unlikely outcome. on the otc markets, the last 18 months has seen the proliferation of trades based on changing perceptions of the likelihood of convergence for the traditionally high - yielding countries and trades based on the differential yields of french and german government bonds. if i might embark on a regulatory diversion here, just for one moment, we at the bank expect those banks involved in convergence trading to undertake rigorous stress testing of their portfolios to assess the market risk they are running on open positions. that testing should also shed light on the potential for changes in their credit risk - for example if an otc contract is moving further in the money due to a market movement, the bank would become more exposed to its counter - party. we believe that the credit exposure implications of stress testing should be taken seriously too and are encouraging banks as best practice to do that. in our view not enough institutions do so yet. after emu, one would expect to see the elimination of exchange rate risk narrowing yield differentials in the bond markets. with exchange rate risk removed and a single monetary policy in operation, national bond yields will differ principally because of differential default risks and differences in market liquidity. that should leave default risk more readily monitorable and more efficiently priced. we should therefore see an enhancement of banks ’ and investment houses ’ credit analysis functions and more trading of credit differentials. my second question was how much will be traded in a post - emu world? this is not an easy question to answer. volumes are difficult to predict. on the one hand, emu may bring about a more stable interest rate environment, as well as eliminating national interest rates and exchange rates, reducing the need for hedging mediums and hence for derivative products. on the other hand, increased liquidity in the euro bond markets could encourage business and we could well see new participants entering the capital and derivative markets. my hunch is that the latter possibility is more likely. and that the market for carefully constructed derivatives contracts, properly sold to customers with a genuine need for them, will continue to expand. that brings me to my third question, where will the trading be done? i do not think that there is a determinist answer to this question. nor,