And, if so, is it permanent? It is not easy to answer these questions because of the high level of uncertainty we face. Confidence in the private sector has been heavily affected, in particular after the collapse of Lehman Brothers, suggesting that the decrease in wealth perceived by agents around the world is very large.
In fact, this programme itself, which has been tailor made for the whole-time directors of the Indian banks, signifies the importance the RBI attaches to sensitising the top management of the banks to the conceptual constructs underpinning the new framework. 2. I am inclined to believe that the Basel II framework is no longer a novelty for most of you.