##prudential policy authorities to postpone the use of macroprudential instruments included in the eu legislation, or to gradually phase them in over time. these decisions were taken against a regulatory framework that assigns some discretion to macroprudential authorities allowing them to tailor their action to the specificities of each country. the discretion exercised by macroprudential authorities, together with the different risk environments and institutional setups for macroprudential policy across countries, have led, as expected, to some heterogeneity in the action taken by these authorities. these differences are reflected not only on the type of instruments used, but also on the methodologies, calibration and speed at which measures were implemented. but this is precisely one of the positive features of the macroprudential policy : the adoption of measures according to specific national circumstances. based on information gathered by the esrb, macroprudential measures implemented in the eu rose from 37 in 2014 to 58 in 2018. these data reflect the increasing intervention of macroprudential authorities across europe – where portugal is also included – over the past five 2 / 4 bis central bankers'speeches years, setting the stage for the first session of today ’ s conference. in this session we will have the opportunity to discuss – benefiting from this increasing experience – the challenges in assessing the effects of macroprudential policy, not only on the financial system and on economic activity, but also on how it interacts with other policy fields. another interesting conclusion that can be drawn from esrb data is that macroprudential authorities have often preferred to use instruments targeted at credit standards, commonly known as borrower - based measures, namely to address the systemic risk arising from developments in the residential real estate market. as we all know this risk has increased in the majority of the european countries, specifically in some of the bigger cities, as also recently stressed by the esrb. given the well - established interaction between real estate market and the banking sector, and well - known underlying systemic risk, we dedicate a whole session of this conference to the systemic importance of housing and mortgage markets and the transmission channels of related macroprudential instruments. in view of the political dimension of some of these instruments, something we all need to discuss is how best they should be designed and communicated to inform public debate. finally, in the afternoon we will also focus on how the high levels of debt of non - financial corporations may impair economic activity and

to an inflation target, maintaining buffers in the form of reserves, and following a prudent and forward looking approach in financial sector policies. this approach, together with prudence in fiscal management, will go a long way in enhancing the resilience of emes. some of these drivers include global slowdown, high inflation and concomitant high interest rates in aes, strong dollar, bank failures in aes and associated contagion risk, high commodity prices, tapering of quantitative easing and associated capital outflows from emes. the indian context 12. let me now turn to the indian context. i wish to highlight some aspects of the reserve bank ’ s approach that have worked well for us. we have not only managed to shield the indian economy from multiple shocks in the last few years but have also enabled it to emerge stronger from the crisis. the indian economy today demonstrates vastly improved macroeconomic fundamentals and buffers. 13. unlike many central banks which are narrowly focused on price stability using monetary policy, the reserve bank has a wider canvas of functions. it is not just responsible for maintaining price stability, but also has the larger responsibility of maintaining financial stability as the regulator and supervisor of banks and other financial sector entities, financial markets and payment systems. 7 this helps us to take a holistic view of the economy, appreciate the synergy and trade - offs involved in various objectives, and act appropriately using multiple instruments at our disposal. 14. the flexible inflation targeting ( fit ) framework which got embedded into the law in 2016, established the primacy of price stability among the objectives of monetary policy, but not unconditionally. it defined the objective as maintaining price stability, while keeping in mind the objective of growth. the fit framework retained the essence of the earlier multiple indicator approach without any ambiguity about the hierarchy of objectives. fit provides flexibility to support growth if the situation so the preamble to the rbi act 1934 describes rbi ’ s main functions as : “ … …. to regulate the issue of bank notes and keeping of reserves with a view to securing monetary stability in india and generally to operate the currency and credit system of the country to its advantage ; to have a modern monetary policy framework to meet the challenge of an increasingly complex economy, to maintain price stability while keeping in mind the objective of growth. ” demands. financial stability which is a pre - condition for price stability and sustained growth is thus implicitly embedded as part of the broader mandate of the