In the context of such an analytical framework, the effect of an asset purchase program also depends on investors’ perceptions of the future path of short-term interest rates as well as their perceptions of the timing and pace of the central bank’s eventual unwinding of its asset purchases.
•  Thus harmonization of the banking sector in the South Asian countries should be driven by these two considerations i.e. to eliminate the distortions in the market structure and to strengthen the regulatory framework prevailing in each country.