Securities and money markets, had the necessary information and overall view of the risks building up in the system. It was, therefore, well placed to operate the countercyclical policies. (iii)  Monetary policy and the countercyclical policy were in the same direction (Table 2). Such a coordinated response was facilitated due to RBI’s wide regulatory ambit.
the framework of prudential regulations and supervision as well as payment and settlement systems. Central banks also play a critical role in crisis management through provision of emergency liquidity assistance. Finally, price stability has to be assured to lay the foundation for long-term sustainable growth. For these functions to be performed effectively the central banks require a degree of autonomy.