Moreover, in its calculation of exposure to market risk, the Committee is now prepared to use the results generated by firms’ own internal models, subject to certain restrictions.33 This has been a significant step, among many others, in the direction of regulators working more closely with the grain of the market. Yet new challenges in the area of capital adequacy are also emerging.
Despite having significant reserves of coal – the third largest in the world, after the United States and China – the country continues to suffer from inadequate domestic supplies and problems of coal shortages. Further reforms in the mining sector may be necessary to increase the mining growth and ease constraints on industrial growth. Higher electricity generation will need assured fuel supplies.