background straddling business, public policy and academia. he became a cross - bench member of the house of lords in 2005, and has been the chairman of the climate change committee since january 2008. he is a visiting professor at the london school of economics and the cass business school of the city university. prior to that, he held prominent positions, such as the chairman of the pensions commission and the low pay commission. outside of the government, lord turner was associated with the standard chartered bank, merrill lynch europe, confederation of british industry, and mckinsey and company. lord turner ’ s 2001 book – “ just capital – the liberal economy ” has been acclaimed for its insights and lateral thinking. 5. there is a deluge of analysis and writing on what caused the crisis and on how to prevent a recurrence. it is not possible for anyone to keep track of all that. but if you want one source from which you can get the diagnosis and prescription for regulatory reforms following the crisis, i suggest you read the turner review conducted under the intellectual leadership of lord turner. spread over four chapters, the review describes what went wrong, and the extent to which the crisis challenges past intellectual assumptions about the self - correcting nature of financial markets. the review sets out the actions required to create an effective banking system, better able to serve the needs of the businesses and households and less likely to be susceptible to financial instability. 6. i want to spend a couple of minutes giving lord turner a brief synopsis of the crisis and the aftermath in india. 7. the crisis that erupted with the collapse of lehman brothers in september 2008 spread rapidly thereafter – sector by sector and economy by economy. almost every country in the world has been impacted, although to a different extent. india was no exception. 8. largely driven by the then intellectually fashionable decoupling theory, there was dismay in india that we were hit by the crisis. this dismay arose from two factors. first, there was surprise that we were hit by a crisis with origins in the banking system even as our banks, and indeed our entire financial system, had minimal exposure to tainted assets. second, there was also concern that we were hit by global recession even though our export sector, at 15 % of gdp, was relatively small. 9. the answer to both these points is that india was hit by the crisis because we are more globally integrated than we tend to acknowledge. we were impacted through all channels – the financial channel,

##phoria 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. 18. financial crises are not uncommon. then how come we don ’ t learn? i can do no better than quote reinhart and rogoff. in their recent seminal book – this time is different : eight centuries of financial folly, they say, [ i quote ] : “ finance professionals and, all too often, government leaders explain that we are doing things better than before, we are smarter, and we have learned from past mistakes. each time, society convinces itself that the current boom, unlike the many booms that preceded catastrophic collapses in the past, is built on sound fundamentals, structural reforms, technological innovation, and good policy ”. [ unquote ] 19. having said that, we must remember that not all financial liberalization is bad ; the world has benefitted from financial innovation and liberalization. true, the damage inflicted by the crisis has been colossal, but the world enjoyed the benefits of the great moderation – over 15 years of unprecedented growth, price stability and low unemployment. 20. it is important therefore to take a balanced view. who better then than a person with the scholarship and stature of lord turner to approach that balanced view. 21. lord turner incidentally is the second chairman of fsa to deliver the c. d. deshmukh memorial lecture. mr. howard davies, the then chairman of fsa, had delivered the tenth c. d. deshmukh memorial lecture in february 2000 on the subject of “ international financial regulation : the quiet revolution ”. in his concluding statement, mr. davies had said, “ i wish you a volatile, but not too volatile, future ”. in many ways, mr. davies prediction has come true. we had our share of volatility, and i believe it has been good for us, giving us as it did, an opportunity for us to work on schumpeterian “ creative destruction ”. 22. lord turner has two important responsibilities. apart from being the chairman of fsa, he is also the chairman of the committee on climate change ( ccc ). i believe that is a fair balance. as chairman of fsa, his job is to save capitalism from well, the onslaught of capitalists