Capital controls are proposed as a solution to restore the independence of monetary policies. This strand of literature is also linked with the “savings glut” explanations of the Great Recession.
The budget for 2000-2001 carried forward reform on public sector banking by announcing intention for a more diversified ownership of public sector banks, establishment of Financial Restructuring Authority, debt recovery, etc. Of particular interest are announcements relating to establishment of a Credit Information Bureau and possible legislative amendments to accord greater operational flexibility to the RBI.