countries making an explicit determination of the mode of presence of foreign banks in the form of branch or subsidiary. what has been the global response? the crisis has shifted the bias towards domestic incorporation of foreign banks i. e. subsidiarisation. indeed, even pre - crisis, a number of jurisdictions mandated local incorporation of foreign banks. the subsidiary form of presence provides several comforts to regulators. first, a subsidiary has its own board of directors, including independent directors, which provides sufficient separation between the bank and its owners to ensure that the interests of domestic depositors are not compromised ; second, the clear delineation between the assets and liabilities of the bank and those of its parent affords greater leverage to the host country to ring fence the operations of the bank ; third, it is local economic conditions, rather than global perspectives, that drive the managerial decisions of subsidiaries ; and finally, it is easier to define the jurisdiction whose laws would apply to the subsidiary, thereby affording more effective control to regulators in a crisis situation. how have we, in india, responded? what is the policy in this regard in india? the road map for the presence of foreign banks in india put out by the reserve bank in 2005 allows foreign banks a choice – of coming in either as a branch or as a subsidiary – but not in both modes at the same time. even so, all foreign banks operating in india, currently 43 in number, have chosen to come in only in the branch mode. reflecting the lessons of the crisis, we deliberated in the reserve bank on whether in india too we should require mandatory incorporation of foreign banks. accordingly, the reserve bank put out a discussion paper in 2011 marshalling the merits and demerits of this initiative. the proposed framework leans towards the subsidiarization model for fresh entrants while nudging existing foreign banks with a balance sheet size above a threshold to bis central bankers ’ speeches convert from a branch model to a subsidiary model. it is expected that this will level the playing field for foreign banks and make the overall indian banking system more competitive and inclusive. in order to reach a final decision on this issue, we needed to clarify some taxation and legal issues. over the last two years, we have worked with the government to resolve the major taxation issues such as exception from stamp duty and capital gains tax on conversion from a branch to a subsidiary. we have yet to resolve a few legal issues which we hope can be done in the next

even to regulators - - on trading in our nation's treasury market. it took considerable effort to gather detailed trade data for just the single day of october 15, 2014, in writing the joint staff report. the board has been supportive of the treasury department's current request for information ( rfi ), which will be concluding on april 22. the rfi will provide information on this issue, as we reassess the adequacy of public information and of the data available to the official sector for its own monitoring of these markets. thank you. i would be pleased to answer any questions you may have. see evangelos benos, richard payne, and michalis vasios, centralized trading, transparency and interest rate swap market liquidity : evidence from the implementation of the dodd - frank act ( pdf ), bank of england, staff working paper no. 580, january 15, 2016. see tobias adrian, michael fleming, daniel stackman, and erik vogt, what's driving dealer balance sheet stagnation?, liberty street economics ( blog ), august 21, 2015. see sifma electronic bond trading report : us corporate and municipal securities ( pdf ) industry and financial markets association ( sifma ), february 17, 2016. bis central bankers ’ speeches, securities