work conference, follow the guidance of deng xiaoping theory, the important thought of three represents and the scientific outlook on development, continue the approach of seeking progress while maintaining stability, develop an accurate understanding and adapt to the new normal situation, strike a balance among preserving stable growth, promoting reform, adjusting structures, improving people ’ s livelihood and preventing risks, continue the sound monetary policy, maintain stability and consistency in the policy, focus more on the appropriate stance of the monetary policy and conduct preemptive adjustments and fine - tuning when necessary. efforts will be made to accelerate the financial sector reform and innovation, safeguard financial stability, forestall financial risks, and improve financial services and management, to support the sound and sustained development of the economy and contribute to the realization of the chinese dream of great rejuvenation of the chinese nation. bis central bankers ’ speeches

subir gokarn : mutual funds and market development in india address by dr subir gokarn, deputy governor of the reserve bank of india, at the cii ( confederation of indian industry ) 7th edition of mutual fund summit 2011, mumbai, 22 june 2011. * * * inputs from sudarsana sahoo, bhupal singh and deepa s. raj are gratefully acknowledged. i. introduction financial sector development can be viewed as a process that enhances four critical attributes of the financial system : efficiency, stability, transparency and inclusion. the emergence of intermediation mechanisms and products that help improve on one or more of these without causing others to weaken are, therefore, a meaningful indicator of financial development. from this perspective, mutual funds play an important role in the development of the financial system. first, they pool the resources of small investors together, increasing their participation in financial markets, which helps both inclusion and the efficient functioning of markets themselves, as a result of larger volumes. second, mutual funds, being institutional investors, can invest in market analysis generally not available or accessible to individual investors, thereby providing services based on informed decisions to small investors. decisions made on the basis of deeper understanding of risks and returns contribute to financial stability, besides helping to mitigate market risk for this group of investors. third, transparency in investment strategies and outcomes, though typically mandated by regulators, is relatively easy to deliver on, so that investors can find out exactly where they stand with regard to their investments at any point of time. as far as regulation is concerned, mutual funds cut across domains. the reserve bank of india regulates three categories of financial markets ; money markets, government securities markets and foreign exchange markets. mutual funds have a presence in the first two and the reserve bank is therefore interested in the role that they play in developing them. in what follows, i shall provide a brief description of the role of mutual funds in these two critical markets and discuss some of the regulatory issues that arise. i shall then make some more general comments about the role of mutual funds in financial inclusion. ii. mutual funds and market development mutual funds have contributed significantly in broadening and deepening of different segments of the money market and, to some extent, the government securities market. money market mutual funds ( mmmfs ) were introduced in india in april 1991 to provide an additional short term investment avenue to investors and to bring money market instruments within the reach of individuals. the guidelines for mmmfs were announced