At the launch of Crisil Complexity Levels, finance minister P Chidambaram recounted an anecdote: ?A gentleman saw me on a flight, thought I was familiar, and told me, ?You?re doing very well, but you should compensate those who?ve lost money in the stockmarket?. I think he genuinely meant that.? Thanks to years of a mai baap sarkar, he explained, people believe that the government insures them against failures and losses. ?A lot of people believe that deposits of nationalised banks are fully guaranteed by the government of India. They?re not! It?s a different matter that if a nationalised bank fails, it?s likely we?d react the same way that Mr Alistair Darling reacted to the failure of Northern Rock!?
New sting
Launching the complexity index, to be offered free to investors by rating agency Crisil, the FM pointed out that the service will be ?both pro bono and involuntary?. Financial products will be rated whether the issuer likes it or not. ?So,? quipped the FM, ?it?s pro bono for the investor, not the issuer. Issuers will need to be careful. There?s going to be a hidden camera somewhere catching your movements on the streets of Mumbai.?
Redemption
In the context of the subprime crisis, the FM said rating agencies needed to ?redeem their reputation?, as R Ravimohan of Crisil-Standard & Poor?s cringed. The FM continued, ?This attempt [of launching complexity levels] is an attempt to redeem their reputation?, adding quickly, ?… not of this agency.?
A hugely relieved Ravimohan folded his hands and managed a big smile, to the amusement of all present.
