Governor Subbarao has been a staunch advocate of RBI’s pro-active role in addressing financial inclusion to help those underserved. As the world’s second most populous country, India has faced an uphill task to expand financial inclusion, especially to individuals in remote areas. But the numbers speak for themselves: in 2011, just 35 percent of adults have bank accounts according to the World Bank’s Global Findex Report. By 2017 that number has dramatically risen to 80 percent. In his keynote address this morning Governor Subbarao will share with us India’s remarkable experience on improving financial inclusion by using digital technologies. Please join me in giving a warm welcome to Governor Subbarao. 4/4
Recently, Matthew Rose, CEO of Burlington Northern Santa Fe (America’s second biggest rail company), expressed frustration at the focus on quarterly earnings when locomotives lasted for 20 years and tracks for 30 to 40 years. Echoes, here, of “quarterly capitalism”. This evidence – anecdotal, survey, quantitative – is broadly consistent with popular perceptions. Capital market myopia is real. It may be rising. For at least some of the jury, however, it remains inconclusive. In 2010, Richard Saunders (Chief Executive of the IMA) summed it up thus: “Now red lights start flashing for me when people talk about shorttermism, particularly when shareholders feature in the same sentence. What do people mean when they claim that shareholders behave in a short-term fashion? And what evidence do they have for it? I have yet to hear a convincing answer to either question”. 3. Testing for short-termism  In the quest for some concrete, quantitative evidence, our test of short-termism uses the forward-looking asset price framework of Miles (1993). A simple example illustrates the basic approach to testing myopia and its implications for project choice. (a)  A simple example  Consider an investment project costing $ This investment is riskless and pays $ at the end of each of 10 years.