funds at very cheap rates without needing to reach out to banks. the sustained deflationary trends in the euro area and japan portend further bouts of qes which can adversely impact the lending business of banks in the emerging markets. further, the large corporates in developed countries normally access financial markets directly for their funding requirements rather than commercial banks. hence, even while this time - specific event of qes might fade away, as indian economy and the financial markets mature, more and more large corporates could start bypassing banks for their funding requirements. ( vii ) would the pain from the loans restructured earlier return to haunt the banks? my understanding is that the prolonged global economic slowdown might have thrown off the projections made earlier at the time of restructuring the advances in the immediate aftermath of the crisis. as the moratorium period comes to a close, the banks would need to take a hard look at the techno - commercial viability of these projects and take the losses wherever the viability seems in jeopardy. timely decisions, including for recall / recovery of the loan, wherever the financial prospects are unviable, would be critical. conclusion 27. before i conclude, let me also give a perspective on the global regulatory reforms and how it might impact the indian banks. basel iii norms have been announced and set to be implemented as per the indicated timeline, with the liquidity regime already kicking in from january 1, 2015. so you are well - versed with the new regulatory phrases - leverage, capital conservation buffers, counter - cyclical capital buffers etc. the d - sibs guidelines have also been announced and the list of banks considered systemically important in the domestic context would be unveiled in august 2015. besides, being subjected to stricter capital and liquidity buffers, these banks may also be nudged to prepare detailed ‘ recovery and resolution plans ’. negotiations are also on at the financial stability board level for implementation of a tlac ( total loss absorbency capital ) framework for the banks identified as g - sibs. the essence of all the above discussion is that the banks would need to substantially augment their capital bases to stay in the business. the question is where do you find such capital? bis central bankers ’ speeches 28. i have covered much broader landscape than i had originally intended to. i believe the elite panel gathered here today would deliberate on the issues raised and also reflect on them later. i once again thank mint for inviting me and wish you all a

. we can only hope that the recovery process will not encourage complacency with regard to the significant amount of repair work that still needs to be done, because the idea is not simply to return to where we came from, but to effect changes that will ensure that next time we will be at least better prepared and be in a position to limit the damage and its costs. difficult as the process is, the work under way in different fora pertaining to the reform of the international financial architecture and enhancing regulatory and supervisory standards needs to continue, and we cannot afford to lose the sense of urgency. 3. inflation targeting in south africa during the global crisis, south africa was in the fortunate position, where it did not have to consider responding to the economic slowdown with unconventional monetary policy. however, before i look at more recent monetary policy developments in south africa, i thought that it may be useful to touch briefly on the bank ’ s mandate. as is the case in many parts of the world, the role and responsibilities of the south african central bank and the appropriate focus of its work has come into much sharper focus. section 224 ( 1 ) of the south african constitution, from which the bank gets its mandate, describes the primary objective of the south african reserve bank as being “ to protect the value of the currency in the interest of balanced and sustainable economic growth in the republic ”. therefore price stability is core to the mandate of the bank. however, it is clear that price stability is not an end in itself, but in the interest of balanced and sustainable growth. it follows then that, as far as the constitutional mandate is concerned, both economic growth and by implication employment, need to be taken into account when making decisions on monetary policy. to give effect to these constitutional imperatives, the bank has been mandated by government to maintain low inflation within an inflation targeting framework. this framework is a means to achieve the objective. it is not an end in itself. we note the current debates around the appropriateness of our mandate and questions about how that mandate is executed. the sarb has indicated its willingness to openly engage various stakeholders to both explain its approach and to explore with them any ideas they may bring forward. governor marcus has identified improved communication and stakeholder engagement as a priority, and has underlined this by creating dedicated capacity in her office for stakeholder engagement and outreach. inflation - targeting was introduced by several countries in the 1990s under relatively benign conditions with generally favourable outcomes. the financial