ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

A+| A| A-

Lessons for Mr Subbarao from the International Credit Crisis

The new governor of the Reserve Bank of India will have to navigate a path that brings international recognition of India's banking supervision and standards, but avoids the worse pitfalls of the "Basle Consensus", which places market prices at the heart of modern financial regulation. The RBI should follow an alternative model of banking regulation that will have three pillars. The first should be that the economic cycle must be put close to the centre of banking regulation, since this is the source of market and systemic failure. The second should be a focus on systemically important distinctions, such as maturity mismatches and leverage. And the third pillar would be to require banks to either self-insure or pay an insurance premium to taxpayers against the risk that the taxpayer will be required to bail them out.


Lessons for Mr Subbarao from the International Credit Crisis

Dear Reader,

To continue reading, become a subscriber.

Explore our attractive subscription offers.

Click here


To gain instant access to this article (download).

INR 59

(Readers in India)

$ 6

(Readers outside India)

Support Us

Your Support will ensure EPW’s financial viability and sustainability.

The EPW produces independent and public-spirited scholarship and analyses of contemporary affairs every week. EPW is one of the few publications that keep alive the spirit of intellectual inquiry in the Indian media.

Often described as a publication with a “social conscience,” EPW has never shied away from taking strong editorial positions. Our publication is free from political pressure, or commercial interests. Our editorial independence is our pride.

We rely on your support to continue the endeavour of highlighting the challenges faced by the disadvantaged, writings from the margins, and scholarship on the most pertinent issues that concern contemporary Indian society.

Every contribution is valuable for our future.