The system of administered interest rates was characterised by detailed prescriptions on the lending and the deposit side, leading to multiplicity and complexity of interest rates. As would be expected, the environment in the financial sector in those years was characterised by segmented and underdeveloped financial markets coupled with paucity of financial instruments.
It was only in the wake of this painful experience that we set up a robust system for the prevention and management of financial crises. Second, we need to keep a close eye on external events.