In Russia, Indonesia, Ukraine, Hungary, Pakistan, etc., the stock markets have closed down for some period of time in this crisis. Regulators in the US and the UK lost their nerve, and did some silly things on short selling, which were reversed in a few days. In India, the fundamental attributes of a sound market have been satisfied. In the worst of painon Friday eveningthere were both buyers and sellers on the screen. On Friday, the top three derivatives at NSE were Nifty (Rs 34,000 crore), rupee-dollar (Rs 976 crore) and ICICI Bank (Rs 947 crore). At closing time on Friday, on the near month ICICI Bank futures, there were buyers at the top five prices for 6,825 shares and sellers at the top five prices for exactly the same amount. There was no payments crisis, despite substantial price fluctuations. The market was working as it should: providing a venue for both positive and negative views to be expressed, and solving out for an equilibrium price. The policy establishment in India has fared well in this crisis. Knee jerk proposals for banning short selling have been rejected; RBI responded with alacrity by cutting CRR; Sebi plodded onwards with structural reforms by rescinding the mistakes about PNs made in October 2007. Last week was a trial by fire, and Indias exchanges, and the economic policy leadership, has come out looking good by international standards. Now the immediate task lies in rapidly solving the liquidity squeeze by setting up a proper operating framework for monetary policy, and undertaking fundamental reforms of the FII framework.