Aspects relating to liquidity have been largely left to each regulator to assess and prescribe a suitable framework under Pillar II of Basel II. In the Indian context, RBI had issued broad guidelines for asset liability management and banks have flexibility in devising their own risk management strategies as per Board approved policy.
As I mentioned, there is a second reason why I think that the reforms have made financial markets safer. The standards were set at the global level, by the FSB and the global standard-setting bodies. This addressed one of the lessons learnt from the last crisis – financial markets and financial institutions are much more closely interconnected than most people realised.