How India Avoided a Crisis - New York Times Article

“All lending to individuals is based on their income. That is a big difference between your banking system and ours.” She continued: “Indian banks are not levered like American banks. Capital ratios are 12 and 13 percent, instead of 7 or 8 percent. All those exotic structures like C.D.O. and securitizations are a very tiny part of our banking system. So a lot of the temptations didn’t exist.” - Ms. Kochhar ,ICICI Bank.

There was also another factor, perhaps the most important of all. India had a bank regulator who was the anti-Greenspan. His name was Dr. Y. V. Reddy, and he was the governor of the Reserve Bank of India. Seventy percent of the banking system in India is nationalized, so a strong regulator is critical, since any banking scandal amounts to a national political scandal as well. And in the irascible Mr. Reddy, who took office in 2003 and stepped down this past September, it had exactly the right man in the right job at the right time.

Complete Article: http://www.nytimes.com/2008/12/20/business/20nocera.html?_r=3&scp=4&sq=Nocera&st=cse