In conducting monetary policy, what measures should be adopted and how they are implemented depends on the economic and financial situations of the country concerned.
While the banks’ funding shortfall was met through parent funding and the Reserve Bank’s expanded liquidity facilities, the experience underlined the need for banks to lengthen the maturity of their liabilities relative to assets, in order to reduce their vulnerability to such shocks. To address these issues, the Reserve Bank introduced a new prudential liquidity policy for banks in April 2010.