Moreover, the Reserve Bank’s balance sheet did not show unusual increase, unlike that of several other central banks. 26. At present, the focus around the world and also in India has shifted from managing the crisis to managing the recovery.
In this respect a small, open economy has less freedom of action than a larger economy. - It is important both to avoid a widespread failure of banks and to bring about a macroeconomic stabilisation. The two are interdependent. The collapse of much of the banking system would aggravate the macroeconomic weaknesses, just as failure to stabilise the economy would accentuate the banking crisis.