As reported in our FSR, the empirical analysis of the portfolio of select banks conducted in the Reserve Bank a few months back revealed that banks were carrying a significant quantum of risks in their portfolios on a gross basis though on a net basis the positions were relatively matched (Chart 6).
There has been lively debate in various fora on the best instruments for controlling systemic risks. This discussion includes the possible role of monetary policy. There is talk about “leaning against the wind”. This idea meets with two types of opinions within the central banking community.