First, the policy of benign neglect of asset price build up has failed. Second, price stability does not necessarily deliver financial stability. Where do we in India stand on inflation targetting? Over the last few years, there has been an animated debate in India on inflation targeting fuelled by two influential studies, one by Percy Mistry and the other by Raghuram Rajan.
BIS Review 39/2010  7  Beginning around the middle of 2007, there was a widespread reappraisal of the risks associated with investing in structured credit products. Securitisation started to suffer severe brand damage as primarily US RMBS incurred significant credit problems as delinquency rates began to rise.