Thank God Human memory is short. Imagine if you had a long memory you would remember the punishment you got in class 7 for not doing your home work! However one of the important FAILURES of the 2008 was the rating agency companies ability to know the difference between a AAA and D-. Even now as a routine they down grade Asian economies and we see how Greece has performed.  Now S&P which rates countries and companies wants to give us gyan on how the Indian economy will perform…yak, yak, yak….read on.

Good prospects for financial sector in India’s ‘New Normal’: S&P, CRISIL

The turmoil in world financial markets and economies over the past year and a half has fundamentally altered the global financial system. This is according to Standard & Poor’s (S&P), the world’s leading provider of financial market intelligence, at an S&P-CRISIL seminar held today “The New Normal: the Changing Face of the Financial Markets”.

The role of capital markets is more crucial than ever, according to Mr. Deven Sharma, President of Standard & Poors, and Chairman of CRISIL. “In developed economies, the losses that many banks have made in recent years and the task they now face to deleverage, rebuild capital and comply with the new Basel regime means that they are constrained in their ability to lend,” said Mr. Sharma. “And while banks in developing markets like India have proved resilient, there is a need to expand the sources of capital available for the economy. That means greater reliance on the capital markets.”

India is emerging from the global economic crisis less scathed than most other nations. Its large, young, and growing population, rising income of the middle class, and high savings rate continue to support strong domestic demand, tempering the impact of weak export markets and other external stimuli. In addition, India’s financial sector remains healthy and its banking system sound. The country has a greater opportunity than advanced economies to address its constraints and create a prosperous “new normal” for its economy.

All this comes within the context of a changing global economic paradigm. According to Mr. Thomas Schiller, executive managing director and region head of Standard & Poor’s Asia-Pacific, “There is a strong sense of hope that the new normal will be about environmentally responsible growth, poverty reduction, social stability, global inclusion, and small-scale and targeted regional and local development programs. There’s also expectation that it will be about the free flow of financial information and capital and the wiser use of regulation. This is the promise of capitalism that is more humane, reasonable, and sustainable.”