15 june 2021 remarks for afme / omfif european financial integration virtual conference thank you for inviting me to deliver this address for your conference today. the theme of the conference – european financial integration – is both a timely and timeless one. on the one hand, the pandemic has further underlined the benefits of previous initiatives related to financial integration in europe, most notably the banking union and its core components. on the other hand, the past year has also refuelled longstanding debates and discussions on the need for european further financial integration. yet a prerequisite for a successful and enduring financial integration at the european level is for europe itself to be aligned with global financial standards in order to achieve a truly global level - playing field. as such, my remarks today, which are primarily in my capacity as chair of the basel committee, will focus on the crucial importance for europe to implement the basel iii framework in a full, timely and consistent manner. financial stability is a global public good. in a world with integrated financial markets, preserving global financial stability requires global minimum standards that are applied consistently and in full by all jurisdictions. this was indeed the motivation for initial basel standards in the 1980s following the latin american debt crisis. and it remains just as important today. covid - 19 has highlighted the clear benefits and importance of having a global and prudent set of regulatory standards for banks. much has been said about how the banking system has remained broadly resilient to date, and how banks have not been “ part of the problem ” in exacerbating the economic crisis. this is in no small part due to the fact that banks entered the pandemic on a much more resilient footing that during the great financial crisis, thanks to the initial set of basel iii reforms, and the ongoing cooperation among basel committee members over the past year. in addition, the unprecedented range of fiscal and monetary measures taken by jurisdictions around the world to support the real economy have largely shielded banks to date from losses. 1 / 3 yet in order to safeguard global financial stability, it is crucial to lock - in the benefits of the outstanding basel iii reforms by implementing them in a full, timely and consistent manner. doing so would ensure that the regulatory fault lines of the global banking system – most notably with regards to excessive variability in risk - weighted asset, the gravity of which remains as important today as it was pre - pandemic – are adequately fixed. these reforms benefited from an extensive consultation

04 to 2006 - 07 ), it averaged 8. 6 per cent. the impressive growth performance since 1990s was possible due to the strong foundation of an indigenous industrial base, domestic entrepreneurial class, knowledge enhancing institutions, and improvement in vertical social and economic mobility during the decades 1950s to 1990. the recent growth dividend is not just a miracle of the marketisation, but is built on decades of conscious nation building since independence, and the extension of rbi ’ s mandate during the period, inter - alia, to building of institutions and improving their delivery capabilities. in terms of financial stability, india remained resilient to a series of crises faced by several emerging markets, because of careful pacing and sequencing of economic and financial sector reforms. in the external sector, india has come out with a clean track record, having met all payment obligations in time, even by pledging gold, a cherished national reserve of sentimental value, when it became necessary in 1991 due to liquidity crisis. yet, both sectors have not only become reasonably efficient and resilient but are also in alignment with global best practices. in the current debate on macro - imbalances of global economy, india does not figure at all as a contributing source, since our saving - investment as well as domestic - external demand balance in the economy are by and large appropriate. rbi ’ s policies increasingly recognise global developments, but their adaption to such developments, in the indian context, is tailored to the prevailing status of institutions and markets, immediate relevance and the evolving needs of the country. as an example, the function of financial supervision continues with rbi, but in 1994, this function attained a semi - independent status through the establishment of an overseeing authority in the board for financial supervision – but within rbi. what is the outlook for the next 20 years? prospects for next 20 years, in our view, are bright for all the reasons and the record of performance that i have given. yet, there are several challenges that are to be met in the medium term, as articulated in the recent annual report of rbi, which reflects the views of eminent directors on its board. permit me to list these challenges briefly. these are growth of agriculture sector, improvement in physical infrastructure, fiscal empowerment to enhance coverage and quality of education and health, improvement in governance and further reforms in financial and external sector. the financial sector reforms are aimed at further development of financial markets, especially bond market, enhancing integration of these markets and further improvement in the banking sector