On the other hand, deeper financial integration is transforming the nature of the risks all over Europe, particular attention being given to systemic risk stemming from contagion through intensified cross-border links (for instance infrastructure, interbank exposures, shareholdings and participation) and to moral hazard issues resulting from much larger institutions posing as a consequence much larger risks in case of failure.
Perhaps this is an ideal forum to describe these new dimensions briefly and narrate the Indian position. The new dimensions relating to external debt policies can be analysed under five broad heads, viz. : level of reserves and external debt; maturity pattern; issues relating to short-term debt; policies relating to transparency and standards; and involving the private sector in forestalling a debt crisis.