Annual Policy Statement for the Year 2009-10- 21st April 2009
Part II. Annual Statement on Developmental and Regulatory Policies for the Year 2009-10
I. Financial Stability
84. The current crisis has triggered several initiatives in an unprecedented co-ordinated manner at the global level with a view to resolving the crisis and strengthening the international financial architecture .
85. While India has been a part of the global initiative, recently a comprehensive assessment of the Indian financial sector has been conducted by the Committee on Financial Sector Assessment (CFSA) (Chairman: Dr. Rakesh Mohan and Co-Chairman: Shri Ashok Chawla) constituted by the Government of India, in consultation with the Reserve Bank. The Committee submitted its report to the Finance Minister on March 25, 2009 at New Delhi. The Report was also released to the public on March 30, 2009 and placed on the Reserve Bank’s website. While the Committee found India’s financial sector to be broadly sound and resilient, it also identified specific concerns. The Committee has made several recommendations towards furthering financial sector development over the medium term.
86. Keeping in view both international and domestic initiatives in the financial sector, it is proposed:
• to constitute a Task Force to look into all the issues that have arisen with regard to the G-20 Working Groups and the report of the CFSA and suggest follow-up actions relevant for the Reserve Bank in the domestic context on an on-going basis, for every quarter;
• in consultation with all regulators and the Government to consider the setting up of a Working Group to implement the recommendations of the CFSA;
• to set up a Financial Stability Unit in the Reserve Bank drawing upon inter-disciplinary expertise from supervisory, regulatory, statistics, economics and financial markets departments for carrying out periodic stress testing and for preparing financial stability reports.
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