. some participants in the discussion on crisis management envisage further, more extensive agreements. however, i see the danger that flexibility in financial crisis situations will be limited if such further, more extensive agreements are reached. each crisis is unique. predetermined contingency plans would restrict flexibility and could therefore impede an optimum solution being reached. this applies even more, as a private sector solution always has priority. ex ante agreements on the sharing of the financial burdens of a crisis are, in my opinion, unfeasible and problematic. to be honest ladies and gentlemen, i ’ m finding it difficult to think of an appropriate conclusion. i will, therefore, finish by asking you to bear my initial comments in mind. thank you very much for your attention. see : ecb, the eu arrangements for financial crisis management, monthly bulletin, february 2007, p 73 ff.

. commercially profit is a laudable objective but we have to remember that balancing the interest of all stakeholders, included and yet to be included, is the only socially optimal choice which will ensure long term survival and growth. casino banking has no future. in this context, let me quote from the review by financial times of satyajit das ’ s book “ traders, guns and money ” – “ this makes fascinating reading ….. old fashioned financiers will read it and weep … ”. ii. achievements of the indian banking system 5. there has been appreciation for india for weathering the financial crisis relatively unscathed. much of it hinged on the sound and resilient banking system in the country. the foundation for the banking sector resilience was laid with the introduction of the financial sector reforms in 1991 with focus on prudential regulation and increased competition. these reforms resulted in a comprehensive transformation of the banking sector. the reforms had a major impact on the overall efficiency and stability of the banking system. the outreach of banks increased in terms of branch / atm presence. the balance sheets and overall banking business also grew in size. the financial performance and efficiency of indian banks bis central bankers ’ speeches improved with increased competition, as reflected in their profitability, net interest margins, roa and roe. the capital position improved significantly, and banks were able to bring down their non - performing assets sharply. this reform phase also witnessed increased use of technology which in turn, helped improve customer service. 6. while financial stability is not an explicitly stated objective under the reserve bank ’ s statute ( rbi act, 1934 ), various measures were undertaken from time to time to strengthen financial stability in the system which covered a wide arena. the approach has evolved from past experiences and a constant interaction between the micro level supervisory processes and macroeconomic assessments. in the indian context, the multiple indicator approach to monetary policy as well as prudent financial sector management together with a synergetic approach through close coordination between rbi and other financial sector regulators has ensured financial stability. some of the other policy measures include capital account management, management of systemic interconnectedness, strengthening prudential framework, initiatives for improving the financial market infrastructure, etc. systemic issues arising out of interconnectedness among banks and between banks and non banking financial companies ( nbfcs – our shadow banks ) and from common exposures were addressed by, among other measures, putting prudential limits on aggregate interbank liabilities