to rapid appreciation of house prices, which was supported by excessive indebtedness of households in some countries. the rise in household indebtedness and house price inflation was particularly significant in those countries in which the decline in nominal interest rates as a result of the shift to price stability had been more pronounced. increased profitability of the financial sector at a time of historically low risk premia. in the years preceding the crisis, the profitability of banks and other financial institutions significantly improved as a result of generally favourable economic and financial conditions. at the same time, it was pointed out that the improvement in profitability had taken place against a background of : ( 1 ) unusually subdued volatility in financial markets, ( 2 ) credit risk premia at historically low levels, ( 3 ) very high valuations of asset prices, and ( 4 ) relatively light regulation and supervision in some countries. moreover, the improvement in the financial positions of banks had taken place in an environment characterised by ample market liquidity across a number of global financial markets, which led to almost no liquidity risk premia being priced in. as the crisis is still unfolding, we cannot tell with certainly how our economic and financial systems will function in the future. however, we can safely predict that many of the elements of the old paradigm will no longer be valid. this will give rise to an economic and financial “ new normal ” in the post - crisis period. some of the its main elements, that can be sketched out based on previous experiences of systemic banking crises, are as follows : reinhart, c. m. and k. s. rogoff ( 2008 ), “ the aftermath of financial crises ”, nber wp 14656. bis central bankers ’ speeches somewhat higher macroeconomic volatility and lower potential growth protracted periods of adjustment in housing markets and in the construction sector an upward shift in the pricing of credit and liquidity risk stricter regulation in order to strengthen the resilience of the financial sector, though probably at the cost of making financial intermediation somewhat more expensive evolving role of central banks ( stronger inclination towards “ leaning against the wind ” policies and the assignment of macroprudential objectives ) changes in the macroeconomic environment, regulatory and supervisory framework as well as industry structure may have very significant implications in the way the financial sector operates in the future. let me briefly elaborate on some of those implications. iii. the banking sector after the crisis an important consequence of

shareholders or their own self - interest. in fact in the debate on csr, what is usually in question is not whether corporate managers have an obligation to consider the needs of society, but the extent to which they should consider this need. csr contributes to corporate sustainability by providing ethical arguments as to why corporate managers should work towards sustainable development. voluntarism and empathy on the part of lead to the success of any csr initiative. while the first pillar defines the vision of the organisation, csr defines the ethics of the organisation. but, csr is not synonymous with sustainability. it is giving back to society a part of what it has taken from the society. depending on the context, it can on rare occasions contribute negatively to sustainability. india is the only country which has explicit legal provision prescribing csr for companies above a threshold. the concept csr has been evolving and changing very fast if one has to look at amendment in the schedule as well as rules relating to csr over the last six months. 20. stakeholder theory – the basic premise of stakeholder theory is that the stronger your relationships are with other external parties, the easier it will be to meet your corporate business objectives. 21. the crucial part for any organisation would be to identify all stakeholders, their needs and prioritise these needs. one of the methods that could be used for this purpose and has been found to be quite successful is the balanced scorecard method, which integrates organisational goals and work flows with those of different groups of stakeholders. while the objectives and priorities of different stakeholders may vary, there is a general agreement on areas such as environmental protection, economic stability, across many stakeholder groups. few groups would argue against these goals, although they may debate the level of priority or urgency. 22. the third pillar, therefore, defines the business objects of the organisation. as a strategic management concept it enables contact with all stakeholders and defines the nature of relationship between the corporate and the stakeholders. 23. the tata group of companies has been working towards corporate sustainability and publishing reports for several years, with tata steel taking the lead, since the year 2000 – 01. in the words of cyrus mistry, chairman tata group, “ ultimately our very purpose is long - term stakeholder value creation ”. another company which merits attention is itc ltd. their commercial model of moving over from being a cigarette company to a multi business conglomerate including agri business was a necessity on account not