•It was also not the kind of panic you would have expected if we had gone down from 21,000 to 8,000. There was a certain philosophical acceptance of the crisis.

Yes, I think people understand that markets go up and markets go down. What worries them is the uncertainty, that is if you tell them that we don’t know if you will get your money for the shares you have sold. That would be more upsetting for an investor than being told that today’s prices are, say, 10 per cent less than yesterday’s prices.

•And that did not happen even on a day when there was a net fluctuation of 1,000-1,500 points up and down.

That’s right.

•Did the system come under stress?

No, actually because these clearing systems have already been stress-tested for things like a number of brokers not being able to fulfil their commitments. Do the stock exchanges have sufficient money in their guarantee funds to be able to see that the counter-party doesn’t suffer? And I think the key in the market is that people understand that they will have their own problems. What they don’t want is the problems of the counter-party being transmitted to them.

•Well, one thing people acknowledged during this period, in fact globally, is that when a real crisis comes, the most liquid and, in some ways, the most realisable investments are in equity.

That is true. In fact, what this crisis has taught is that you didn’t have a problem in any of the exchange credit instruments. It was the OTC markets that created the maximum problem.

... contd.