get the best results if we move forward in all four of them simultaneously. importantly, it ’ s not enough to announce measures to tackle these issues. what we need is implementation and verifiable success. and we are just not there yet. 4 outlook ladies and gentlemen, when i arrived in tokyo yesterday, the blossoming cherry trees weren ’ t the only thing that caught my eye. i was also pleased to see that the construction work around tokyo station not far from here has been completed. i think work there has been under way for something like a decade now, during which time the district has been given a major facelift. the result is quite impressive. in about the same stretch of time, our regulatory and supervisory architecture has also been given a major facelift of its own – both globally and in europe. we have finalised basel iii at the global level, and we have built a banking union in europe. the result here is quite respectable as well. nevertheless, neither our regulatory and supervisory architecture nor tokyo city centre is finished for good. here in tokyo, the next construction sites are visible here and there, and projects for new high - rises are in the making. in the global regulatory architecture, basel iii may be finished but its implementation is not. in europe, the banking union is on its feet but some gaps remain. our task for the coming years is to wrap up the job we ’ ve started – which is to further improve financial stability and provide certainty for financial institutions. now i am looking forward to our discussion. 4 / 4 bis central bankers'speeches

anand sinha : striking a balance – credit penetration and npa management – role of information sharing address by mr anand sinha, deputy governor of the reserve bank of india, at the fourth annual credit information conference, mumbai, 7 march 2012. * * * inputs provided by mr manoj sharma, smt rachna dikshit and smt jayanthi n are gratefully acknowledged. mr. nair, chairman, credit information bureau ( india ) limited ( cibil ) and cmd, union bank of india ; mr. mallya, cmd, bank of baroda ; mr. siddharth mehta, president and ceo, transunion ; mr. thukral, md, cibil and other distinguished guests. it is indeed an honour for me to address you all here during the fourth annual credit information conference. banking is a risky business. banks, or more generally the credit institutions, in their role as intermediaries take upon themselves significant credit risks, while interposing between lenders ( depositors ) and borrowers. credit risk is, by far, the largest risk faced by banks. the risk transformation, where they become borrowers to lenders and lenders to borrowers, leads to warehousing of risks in credit institutions. in fact, this risk transformation offered by credit intermediaries is the cornerstone of credit intermediation which facilitates pooling of savings for being lent for various economic activities. in credit markets, the lenders ’ knowledge of a borrower ’ s likelihood to repay ( risk profile ) is imprecise and has to be estimated based on available information. borrowers, obviously, would have superior information than lenders about their own past actions and future intentions although it is the lender who bears the negative consequences of the risk. moreover, borrowers have incentive to misrepresent their risk profile. in any case, lenders cannot rely solely on the information provided by the applicant but must evaluate borrowers ’ claims even when borrowers are truthful. this entails significant cost and time. such information asymmetry has consequences for lending as it results in misallocation of credit. let me explain. before the advent of credit information models, traditional neoclassical economics assumed that markets were “ informationally efficient ”. this implied that one cannot consistently achieve returns in excess of the average market returns on a risk adjusted basis, given the information available. more recent work by stiglitz and others has shown that only