in capital flows and governments ’ balances. in terms of the evolving global prudential framework, the emphasis has generally been more on capital, as a means of reducing vulnerability to risks, than on prudential requirements for liquidity risk. the issue of liquidity has not been generally addressed in as structured a manner as the issue of capital requirement. aspects relating to liquidity have been largely left to each regulator to assess and prescribe a suitable framework under pillar ii of basel ii. in the indian context, rbi had issued broad guidelines for asset liability management and banks have flexibility in devising their own risk management strategies as per board approved policy. however, in regard to liquidity risks at the very short - end, rbi has taken steps to mitigate risks at the systemic level and at the institution level as well. first, rbi had, early on, recognized the risks of allowing access to the unsecured overnight market funds to all entities and therefore restricted the overnight unsecured market for funds only to banks and primary dealers ( pd ). to enable this phase - out of all non - bank / non - pd participants from the uncollateralized money market, the repo markets – both bilateral repos and collateralized borrowing and lending obligations ( a form of tripartite repos ), were developed. since 2005, the overnight call market is a pure inter - bank market. the impact of this has been that the volumes have shifted from the overnight unsecured market to the collateralized market. second, greater inter - linkages and excessive reliance on call money borrowings by banks could cause systemic problems in two ways. one, if a bank is not able to repay the loan on the due date or the market perceives that the bank is having funding problems it may not be able to continue borrowing in the inter - bank market. if this results in non - payment, the bank which has lent the funds could itself face liquidity problems if it has also borrowed on an overnight basis to lend to this bank. the risk of financial contagion could also arise if other banks in the system that are similarly placed become affected by such concerns. the external costs of failure – the costs that are not borne by the bank and are, therefore, unlikely to be taken into account in its own planning – are therefore greater. the rbi has therefore introduced prudential measures to address the extent to which banks can borrow and lend in the call money market in relation to the

generation currency coin series. prominently featured on the obverse of the 20 - piso coin is manuel l. quezon, the first president of the philippine commonwealth who advocated the adoption of the national language ; created the national economic council, the precursor of the national economic development authority ; and worked passionately to regain philippine independence. the reverse side features the bsp logo and the malacanan palace, the official residence of the president of the philippines. consistent with the theme of the ngc coin series, a native flora is featured in the 20 - piso coin — the nilad, which is believed to be the origin of the name of the country ’ s capital city, manila. it should also be mentioned that president quezon is the first philippine president to reside in this proud and iconic palace. these design elements put emphasis on the cultural and historical significance of coins to 1 / 2 bis central bankers'speeches philippine society. moreover, the design of this bi - color 20 - piso ngc coin makes it easily distinguishable and highly secure. the bsp is also introducing today the enhanced 5 - piso ngc coin with nine sides to make it more distinct from other denominations in the ngc coin series. this reaffirms bsp ’ s commitment to not only uphold the highest standard of excellence, but also listen to the public ’ s observations as it endeavors to bring central banking closer to the people. maraming salamat and mabuhay! 2 / 2 bis central bankers'speeches