An important hallmark of the pursuit of financial stability in India has been the adoption of a consultative approach to policy formulation, taking on board the various stakeholders in the financial system. Such an approach has had the merit of providing useful lead time to market participants to adjust their behavior in conformity to the regulatory guidelines.
IOs and option ARMs are estimated to have accounted for almost one-third of all U.S. mortgage originations in 2005, compared with less than 10 percent in 2003. Despite their recent growth, however, these products, it is estimated, still account for less than 20 percent of aggregate domestic mortgages outstanding of $ trillion.