Second Quarter Review of Monetary Policy 2009-2010
-Announced on the 27th October 2009
Part B. Developmental and Regulatory Policies
I. Financial Stability
107. At the recently held G-20 Summit during September 24-25, 2009 in Pittsburgh, it was decided, among others, to make sure that the global regulatory system for banks and other financial firms reins in the excesses that led to the crisis and as such committed to:(i) raise capital standards; (ii) implement strong international compensation standards aimed at ending practices that led to excessive risk-taking; (iii) improve the over-the-counter (OTC) derivatives market; (iv) create more powerful tools to hold large global firms to account for the risks they take; and (v) ensure that standards for large global financial firms are commensurate with the cost of their failure. It was also agreed to reform the global architecture to meet the needs of the 21st century.
108. Keeping in view both international and domestic initiatives in the financial sector, the Annual Policy Statement of April 2009 indicated setting up of a Financial Stability Unit (FSU) in the Reserve Bank. Accordingly, the FSU was constituted in July 2009 drawing upon inter-disciplinary expertise from the regulatory, supervisory, statistics, economics and financial markets departments of the Reserve Bank. The FSU will: (i) conduct macro-prudential surveillance of the financial system on an ongoing basis; (ii) prepare financial stability reports; (iii) develop database of key variables which could impact financial stability and a time series of a core set of financial indicators; (iv) conduct systemic stress tests to assess resilience; and (v) develop models for assessing financial stability. The FSU also provides the secretariat to the Reserve Bank’s representative in the Financial Stability Board (FSB). The FSU is expected to bring out the first Financial Stability Report by end-December 2009.
Second Quarter Review of Monetary Policy 2009-2010... click here
Highlights of 2nd Quarter Review of Monetary Policy 2009-2010... click here
RBI CREDIT AND MONETARY POLICIES (1999-2010)... click here