Second, de-regulation and opening up of the economy was sequenced appropriately. Along with the opening up of the economy, the financial markets were also developed to improve efficiency in financial intermediation. Third, the Reserve Bank also being the regulator and supervisor of the financial system, information related to financial system always flowed to the central bank, which helped in fine tuning the monetary policy.
We are committed to learning the lessons from the U.S. bank failures for our program of supervision and regulation. I will offer three observations about the events. The first observation is that it is very difficult to resist the natural human tendency to fight the last war. In 2008 we saw banks come under stress from outsized credit losses and insufficient liquidity.