guidelines are issued to banks from time to time on parameters for restructuring. the extent of active interaction between individual borrowers and banks is, therefore, not clear. it is increasingly felt that individuals are not in a position to take full advantage of the guidelines issued to the banks for variety of reasons. these may include inadequacies in managing their finances especially delinquent accounts. further, individuals may not be able to articulate their financial situation adequately to the banks. it will be in the interest of the banks themselves to help individual borrowers through appropriate credit counselling. public policy could, therefore, have an advisory role in encouraging mechanisms in the form of credit counselling in regard to individuals. there are a variety of ways in which this has been accomplished in different countries, but in india we are just beginning to address the situation. some urgency has been lent to this issue in india in view of rapid growth in consumer loans, housing loans and the more recent emphasis on financial inclusion. it is interesting to note that the terms of reference of the financial inclusion task force initiated by the treasury of the united kingdom to consider solutions to the problem of financial exclusion identifies three key areas. this includes face - to - face money advice in addition to access to banking and access to affordable credit. global practice the first well - known credit counselling agencies were created in 1951 in the united states when credit grantors created the national foundation for credit counseling ( nfcc ). their stated objective was to promote financial literacy and help consumers to avoid bankruptcy. credit counselling, however, came into its own as a result of the passing of the housing and urban development act in 1968. under this act, the us department of housing and urban development was allowed to authorize public and private organizations to provide counselling to mortgagors. the resulting services and infrastructure to provide them led to the development of the credit counselling industry. in 1993, the association of independent consumer credit counseling agencies ( aiccca ) was founded in the united states, citing a need for industry - wide standards of excellence and ethical conduct. this formally organized the nfcc ’ s competition. the aiccca was formed from the group of counselors who favored telephone delivery of debt management programs. the nfcc was, in the beginning, strongly opposed to this telephone business model, primarily favoring face - to - face counselling as a more effective solution. eventually, all organizations practiced both phone and faceto - face processes with some agencies

main developed economies also had to revise their usual regulation, operation and intervention mechanisms. by implementing new facilities, they significantly expanded their scope. as a result of the difficulties experienced by bear sterns and, despite the fact that the prudential regulation and supervision network was focused on the behavior of commercial banks, the fed “ throw away the textbook ”. because of its critical role in the process of credit generation, and for being involved in a complex network of financial transactions, the eventual bankruptcy of an investment bank in a context of generalized leverage was expected to cause systemic events. this new prominence of market - based intermediaries will have long lasting effect on the creation of the theoretical schemes behind monetary policy. as usual, and regardless of undeniable costs, times of crisis are breeding ground for creativity, but also for the inevitable revision of previously accepted principles. in times of turmoil, theoretical consensus on “ what to do ” and “ how to do it ” tends to vanish. in other words, if the relationship between economic theory and policy recommendations is reasonably well defined during “ normal ” times, in times of turmoil, this relationship becomes much weaker. admittedly, sometimes this may be due to the relative complacency characterizing boom periods, and to the inadvertent way in which changes build up, with consequences that become apparent very vividly when it is perhaps already too late. as i see it, “ the perfect storm ” is revealing us the non linearity of reality, and that our models need to be reformulated and surely made more complex. in other words, every crisis should be seen as an opportunity to revise fundamental structures. it is now clear that financial regulation policies, with their slight variations at a global level, were to be revised. the excellent paper recently presented by adrian and shin of the federal reserve of new york is definitely a step in the right direction. this paper has, at least, two elements worth considering : first, it reintroduces financial intermediation as an essential part of economic models and second, it gives monetary aggregates a role to play in the central bank policy function again. in addition, it arrives at a conclusion that i have been claiming in discussions with my colleagues for some time : far from being disconnected, financial stability objectives and the rest of the traditional monetary policy objectives are two sides of the same coin. that is, we have reached a point in which economic theory is having a hard time keeping up with prax