Indian financial system is catching up fast with these developments in the post-reform period. The regulatory regimes and supervisory systems in the changing environment face new challenges in safeguarding the integrity, efficiency, soundness and stability of the financial system. This calls for a study of the regulatory and supervisory arrangements.
Now, why then have yields of high credit quality bonds – and I refer to German bonds merely for ease of exposition – why have they gradually decoupled from swap rates since about the middle of last year?