Doubt has been expressed in certain very serious quarters as to whether the sum of the risks taken by financial agents in this regard the world over is fully contained. Banks play a prime and vital role in a financial system. A stable banking system is thus a pre-condition for a stable financial system.
This, in turn, as many research studies have shown, also inhibits the flow, over the medium to long-term, of foreign capital on a sustainable basis. Typically, the foreign capital has preferred the destinations which have well-developed, deep, liquid and efficient hedging institutional structures like forex derivatives.