Duvvuri Subbarao on Lehman, the Global Financial Crisis and the Taper Tantrum | Part I

In this episode of Market Makers on BasisPoint Insight, Manoj Rane speaks with Duvvuri Subbarao, former Governor of the Reserve Bank of India, about managing crises at the heart of the financial system.

Subbarao recounts taking charge at the RBI in September 2008, just days before the collapse of Lehman Brothers, and explains how the central bank responded as global finance slid into panic. He discusses the decision to ring-fence Lehman’s Indian operations, the importance of signalling preparedness, and the lessons learned from managing markets under extreme uncertainty.

The conversation then turns to the 2013 taper tantrum, when the rupee depreciated sharply and India was grouped among the “fragile five”. Subbarao explains why exchange-rate crises are fundamentally different from inflation shocks, how real-time decision-making becomes unavoidable, and why communication itself emerged as a powerful, but risky, policy tool.

A rare, first-hand account of crisis central banking, market psychology, and leadership under pressure.