##s the banking sector and aspires to act as the bridge to provide last mile connectivity. further, niche nbfcs fulfil the unmet and exclusive credit needs of infrastructure, factoring, leasing and other such activities. non - traditional and digital players are now entering this space to deliver financial services by way of innovative methods involving digital platform. there is a web of inter - linkages of the nbfc sector with the banking sector, capital market and other financial sector entities. the reserve bank keeps a close watch on these inter - linkages to ensure financial stability. with a view to strengthen the sector, maintain stability and avoid regulatory arbitrage, the reserve bank and the government have been proactively taking necessary regulatory and supervisory steps. it is our endeavour to have an optimal level of regulation and supervision so that the nbfc sector is financially resilient and robust. we will not hesitate to take whatever steps are required to maintain financial stability in the short, medium and the long - term. 15. our objective is to harmonise the liquidity norms between banks and nbfcs, taking into account their unique business models. we are also looking at governance and risk management structures in nbfcs. recently in may 2019, nbfcs with a size of more than ₹5, 000 crores have been advised to appoint a functionally independent chief risk officer ( cro ) with clearly specified role and responsibilities. this is expected to bring in professional risk management to the working of large nbfcs. 16. the move to bring housing finance companies ( hfcs ) under the regulatory ambit of the reserve bank is significant, given their asset - liability profiles. including hfcs, the size of the nbfc sector constitutes about 25 per cent of combined balance sheet of scheduled commercial banks. the reserve bank will take necessary measures to deal with these challenges. headwinds from financial markets 17. apart from banks and non - banks, headwinds to financial stability can also originate from financial markets. the increasing frequency and severity of currency and debt crises globally and 3 / 6 bis central bankers'speeches their ability to cause output loss calls for careful regulation and surveillance of financial markets. globalization of finance, by amplifying the risk of contagion, and thereby constraining the policy space for effective regulation, has added to the difficulty of this task. as a regulator of various market segments such as money markets, g - sec, forex

, the panic of 2008, speech delivered at the council of institutional investors 2009 spring meeting, washington, april 6. bis central bankers ’ speeches crisis. funding was drying up for one institution after another and for one market after another. our efforts to provide liquidity were criticized by some as bailouts for the banks. i can understand how it could seem that way, but i also know that every action the fed took was directed at improving the economy rather than the well - being of the banks. we had to make many difficult decisions in the darkest days of the crisis. for me, the decisions were made a bit less difficult by several factors. first and foremost was the calm, decisive leadership by chairman bernanke, whose lifelong study of economics and economic history provided unique preparation for his own role in history. almost as important were the hundreds of fed economists, lawyers, bank supervisors, and market specialists who worked around the clock to craft creative solutions to every financial market challenge. i will never know how many hours it took to develop and implement all of the programs they presented in a series of emergency board meetings. i do know that they responded to every question and strived to mitigate every risk that was identified. and while the strain was evident in their tired eyes, the collegiality and intellectual rigor that i have come to know as a hallmark of the federal reserve never wavered. finally, for me, it was the image of all those small businesses that depended on credit to run their businesses. the fed provided credit to banks large and small. in addition, through other programs, we supported the market for securities backed by loans to households and businesses, including loans for business equipment, inventory, insurance payments, business credit cards, and loans guaranteed by the small business administration. to be sure, lenders reacted to uncertain economic conditions and weaker borrowers by tightening credit standards. but with liquidity provided by the federal reserve, loans to borrowers who met the tighter standards continued to flow. the u. s. economy still faces challenges, but i am convinced that the forceful actions of the federal reserve in 2008 helped prevent what clearly would have been a far worse scenario. the federal reserve was originally created to guard against financial panics. but in modern times, many people think of monetary policymaking as its primary role. the congress has given the federal reserve two objectives, known as our dual mandate : to foster maximum employment and price stability. in its conduct of monetary policy, the fed