For people to take risk, to innovate and grow, to have confidence in the future, the environment of low and stable inflation has to be supported by the maintenance of overall financial stability. Finally, it is the existence of sound financial institutions that is necessary for the appropriate supply of financial resources to take place.
It is the job of the central bank and other regulatory institutions to ensure the existence of such an overall financial environment. The whole process of economic reforms, capital market forms, financial market reforms, banking reforms, and monetary policy reforms have all combined to provide such an environment.