Anand Sinha

Ms. Usha Thorat, Director, Centre for Advanced Financial Research and Learning (CAFRAL), Mr. Aristobulo de Juan, a veteran supervisor and an international consultant, Mr. Pierre Yves Thoraval, former Deputy Secretary General of the French Banking Commission, Mr. Chris Cardoza, Program Director at the Toronto Centre, Ms. Shyamala Gopinath, former Deputy Governor, Reserve Bank of India and all the esteemed delegates of the conference. It is my privilege to address you all in this conference today.

It is both a pleasure as well as a privilege for me to address this august gathering today. The International Conference on Co-operatives, organized by the CAB, is a part of international initiatives celebrating the spirit of co-operation in the year 2012, declared by the United Nations as the International Year of Co-operatives. The theme of the International Year of Co-operatives, “Cooperative enterprises build a better world”, represents, quite aptly, the very important role played by co-operatives in poverty reduction, employment generation and social integration, eventually leading to a better world. The role of co-operation in social development and empowerment is well acknowledged and its role is only going to be more vital in future.

Regulatory reforms undertaken in the aftermath of global crisis have generated a serious debate regarding their adequacy, efficacy and also of their need and relevance. Some argue that the reforms are a case of overkill comprising onerous measures such as enhanced capital and liquidity requirements which will adversely affect economic growth and profitability of banks. The structural measures such as prohibition under the Dodd-Frank Act on proprietary trading by US banks, bank holding companies and their affiliates, or moving OTC derivatives to the central counterparties are also criticised to be negatively impacting market liquidity and financial firms’ ability and willingness to innovate. The proponents of reforms, however, aver that the reforms are imperative to put the crisis battered financial system back on track, restore systemic stability and facilitate long-term growth. This paper, analyzing both the arguments, suggests that the answer lies in striking the right balance by devising a regulatory framework which ensures stability, encourages innovation and promotes growth.

2. Banking is a risky business. Banks, or more generally the credit institutions, in their role as intermediaries take upon themselves significant credit risks, while interposing between lenders (depositors) and borrowers. Credit risk is, by far, the largest risk faced by banks. ...

Thank you for inviting me to deliver the keynote address at this microfinance workshop. Microfinance is currently at the centre of intense policy debate, especially, in the context of governance and regulatory oversight related issues. The current workshop which focuses ...

... would be a catalyst to growth and would also contribute indirectly to financial stability. ... phones have become an essential as well as conveniently available communication tool for almost ... As such, mobile banking is the most happening area of development in the banking sector ...

4. The most glaring inadequacy has been the absence of a framework to deal with systemic risk. There has been an underlying assumption that strong institutions make a strong system. This has been proved to be fallacious as legitimate actions taken by individual institutions ...

3. All of you must be closely observing the global developments in the context of fi nancial crisis which shook the entire world, and the consequent overhaul of the regulatory framework. Both the regular banking system and the shadow banking system have come under greater regulatory focus on account of gaps in the respective regulatory frameworks and also, most importantly, on account of inter-linkages between both the systems. The shadow banking system that had burgeoned in the run up to the global fi nancial crisis was one of the major causes of the global turmoil and quite understandably, the regulators are revamping its regulation to ensure fi nancial stability. Before I dwell further on the regulatory developments, let me touch upon some underpinnings to the conceptual framework.

Good Morning. It is indeed my privilege to be addressing you today in this Conference in which officials from industry and banking sector are participating. Today, I want to reflect on some of the challenges and dilemmas that we face as regulators of the banking system. A few of these challenges and dilemmas are in the context of the rapidly evolving regulatory landscape in the aftermath of the crisis, very aptly reflected in the theme of this Conference “Global bankingParadigm shift”.

2. There are two facets to systemic risk. One is in terms of its distribution within the system at any given point in time and another is its evolution with time. The cross-sectional dimension is how risk is distributed within the system at any given point in time. Systemic risk in this ...