A final set of policies aims at transforming shadow banking into resilient marketbased finance. These policies include new regulations for money market funds and securitizations. Their broad purpose is to mitigate systemic risks associated with non-bank financial intermediation.
All these steps seek to create a more conducive climate for exports. Capital Flows 10. With regard to capital flows, India has adopted an approach marked by progressive liberalisation but calibrated to the realities of the domestic situation, including the evolution of financial markets. A diverse range of instruments for managing exchange rate risk for an expanding investor base has come into play.