Highlights of RBI Reddy's speech at Manchester, UK

[K.Karthik Raja]

Highlights of RBI Reddy's speech at Manchester, UK
Friday, Jul 4

MUMBAI - Following are comments of Reserve Bank of India Governor
Y.V.
Reddy at a meeting of the Task Force on Financial Markets Regulation,
organised by the Initiative for Policy Dialogue at Manchester, U.K.,
Tuesday.

* Policy dilemmas have become more acute at current juncture.
* Calming nerves on inflation most urgent priority of central banks.
* High inflation in short term difficult to avoid.
* High volatility with variability raises uncertainties.
* Globally facing GDP-inflation dilemmas amid financial turmoil.
* No signal yet if threats to financial stability fully resolved.
* Financial-real sector linkages more worrisome compared with before.
* Indian financial market conditions orderly.
* Indian banks reflect strength, resilience.
* No indication yet if threats to U.S. recession abated.
* India by-and-large spared of sub-prime related contagion.
* Indian banks reflect strength, resilience.
* Indian financial market conditions are orderly.
* Need to debate if there is a big "financialisation" of companies.
* Some firms' financial market position may not be related to main
operations.