The rating enhancement reflects the probability of government support and can be as large as five notches. For smaller banks, the enhancement is lower or even zero, because it is perceived that smaller banks are less likely to receive government support when they get in trouble. Effective resolution measures will thus eliminate the support-related rating advantage and lower funding costs of large banks.
The staff members and consultants in the History Cell in the Reserve Bank, under the guidance of Executive Director Deepak Mohanty, produced this volume with exemplary diligence, intelligence and commitment. I want to place on record my deep appreciation for the work of the Advisory Committee, the staff and consultants. They are going to be more influential than they realize. 22.