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Indian financial system resilient, says former IMF chief Camdessus

23 March 2009  

New Delhi: Here’s a big pat for the Indian financial system and it comes from none other than Michel Camdessus who was the chief of International Monetary Fund (IMF) for 13 years including 1997-98 when Asian currency crisis rocked the global economy. The Indian financial system seems to have absorbed much less toxic assets as compared to a number of other countries, he said on Saturday.

Mr. Camdessus, who is now the special envoy of French President Nicholas Sarkozy for G20 deliberations on the global economic crisis, emphasised that the Indian financial system was ‘resisting the global economic crisis well’ and he found no major concern.

The French financial expert is now on a visit to India and he has met Planning Commission deputy chairman Montek Singh Ahluwalia to co-ordinate the strategies of the two countries for the forthcoming meeting of the G 20 which includes finance ministers and central bank chiefs of the top economies of the world including the US, Japan, UK, France, Germany, Russia and China. Scheduled for April 2, the next meeting of G 20 is to discuss strategies for sustained recovery from the global economic slump through a multi-pronged approach.

Mr. Camdessus appreciated the government’s efforts to inject more capital into (public sector) banks and there was no particular are of concern. “The situation is reasonably under control,” he noted. That should sound like music to financial sector regulators and the government, apart from Indian finance sector players. The appreciation is significant in view of the weakness seen in the financial sector in many developed countries including the US, the UK, Germany and France.

Mr. Camdessus, who was also the governor of Bank of France, said that India and France are planning to work together in brining more transparency into tax havens. India views tax havens like Cyprus, Isle of Mann and British Virgin Islands as a potential source of threat in terms of tax evasion, money laundering and terror financing.