However, this way of looking at risk management does not mean at all that there is no role for the sovereign or for regulators in financial markets. Profound changes have also taken place in the economic and financial landscape in India over the last two decades or so, marked by wide-ranging reforms in both the real and financial sectors.
Adoption of a unified and market-determined exchange rate for the rupee in early 1993, followed by current account convertibility in 1994, enactment of a new foreign exchange law in 1999, and significant  BIS Review 69/2007  1  though gradual capital account liberalization over the last decade have led to a manifold increase in the volumes of both current and capital account transactions between India and the rest of the world.