Third, India had started using counter-cyclical provisioning norms and risk weights prior to the global crisis, and in the post crisis period such measures – known widely as macro-prudential tools – have become the mainstream consensus.
Fourth, given the level of development of the financial systems in the SAARC countries, the debate on financial stability and monetary policy interactions may be somewhat different from what we see in the advanced financial systems. The development of the financial system, thus, has to be seen as an additional consideration in this debate.