In the emerging economies, it is the limited spread of the financial sector as well as the constrained and or underdeveloped / lower capacity in terms of the products, services and institutions that subject these economies to various financial risks, as against the advanced economies where the risks emanate from the sheer scale and volumes of financial transactions, size, connectivity and systemic importance of the financial institutions, sophistication and complexity of the financial products and services etc.
For example, maximum intraday credit extended to NISS participant was about 14 percent of the settlement value in June 2003; this ratio has come down to about 6 percent in April this year. These reforms were mainly meant to improve the ability of the central bank to manage the liquidity of the monetary system and to manage risk exposures.