RESERVE BANK OF INDIA SETS UP FINANCIAL STABILITY UNIT

The Reserve Bank of India (RBI) on Thursday said it has constituted a Financial Stability Unit (FSU) to review the financial situation in the wake of current economic crisis.

The unit will prepare financial stability reports, develop a database of key variables which could impact financial stability in coordination with the supervisory wings of the Reserve Bank and also develop a time series of a core set of financial indicators, the central bank said in a statement.

It will also conduct systemic stress tests to assess resilience in the time of economic downturn and also develop models for assessing financial stability in due course.

Following India's inclusion in the Financial Stability Board (FSB), the FSU will provide the Secretariat to the Bank's representative in FSB.

RBI had decided to set up a financial stability board keeping in view both international and domestic initiatives for resolving the current crisis and strengthening the international financial architecture.

In the annual policy statement of April 2009, it had proposed among other initiatives, the setting up the unit in the Reserve Bank taking the services of inter-disciplinary expertise from supervisory, regulatory, statistics, economics and financial markets departments.

(PTI) bl

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