It is felt that this is an appropriate time to explore more formally the relationship among different segments of the markets and sectors of the economy, which will help in understanding the transmission mechanism of the monetary policy in India. With this objective in mind, RBI had already announced its intention to build an operational model, which will help the policy decision process.
While such questions have largely been settled regarding price stability, no similar consensus exists when it comes to financial stability. There is neither a settled institutional template for financial stability nor a consensus about the role of central banks.