to convey to you how we carefully weigh the various policy options and how, once we have made a policy choice, deliberate on what to say and how to say it. the reserve bank takes its communication role seriously. it is our continuing endeavour to communicate in a clear manner so as to minimize scope for misinterpretation ; in an effective manner so that the diverse target groups get the relevant information and message ; in an honest manner such that we explain the known knowns and indicate the known unknowns ; and in a consistent manner such that people can link our policies and action to past trends and future projections. 53. no doubt, in the reserve bank, we still have a way to go to reach the best practice in communication. all i can say is we will make every effort to get there. bis central bankers ’ speeches some recent initiatives towards enhancing communication substantive • increased the frequency of monetary policy reviews • pre - policy consultations with academics and media in addition to other stakeholders • rationale behind the policy decisions and context to the decisions clearly communicated in the monetary policy • forward guidance provided as and when expedient • expected outcomes from the policy actions are spelt out • rationalised macro and monetary developments and monetary policy documents to avoid overlaps and duplication – shorter, crisper • publication of financial stability report twice a year • draft policies on website for feedback • explicit efforts to keep the consultation documents on major policy decisions clear of rbi biases • real - time handbook of statistics on the website • placing more and more research and data in public domain, including various surveys that provide inputs for the policy procedure • publication of governor ’ s and deputy governors ’ public engagement schedule on rbi website to demystify these offices • live webcast / telecast of governor ’ s press conference and archiving it on website • publishing transcript of governor ’ s press conference on website • teleconferencing with media • editors conference once every year • post - policy interaction with researchers / analysts • streamlined major rbi publications, including monetary policy, to make them concise and reader - friendly • seminars and briefings with media and academics on important publications and research • informal briefings and training programmes for media persons to explain role and functions of rbi and to explain specific immediate issues • publication of comic books on banking and central banking to reach out to children • outreach programmes to remote areas across the country for financial literacy / inclusion • participation in local exhibitions and melas • town hall events, outside of metro

and draw these down during downturns so as to be able to continue lending while absorbing losses. the underlying rationale is sound, but somewhat counter - intuitive. experience shows that markets demand that banks maintain higher capital and provisioning during a downturn to withstand higher risks. if markets continue with such expectation, banks would likely “ hoard ” capital and stop lending which will exacerbate the downturn. the communication challenge, therefore, is to educate the market on the basel iii notion of buffers and their manner of use so that these safeguards function the way they are intended to. 34. the second communication challenge under the proposed basel iii package comes from the “ comply or explain ” framework under which countries have the option to deviate from certain components of the package and explain why they have deviated. the concern really is that the market, known for its unfailing ruthlessness, will penalize any deviation, and the communication challenge for regulators is to persuade the markets to evaluate the country ’ s compliance based on the explanation. ( viii ) systemically important financial institutions ( sifis ) 35. the basel committee on banking supervision ( bcbs ) and the financial stability board ( fsb ) are currently engaged in devising a framework for regulating and supervising systemically important financial institutions ( sifis ). sifis, as is well known, were at the centre of the recent crisis. since they are “ too big to fail ” and “ too interconnected to fail ”, they had to be rescued at a huge cost to the tax payers. the international level work, currently in progress, is engaged in identifying ways to reduce the moral hazard of sifis, defining the criteria for their identification and designing differential capital and liquidity surcharge for them. 36. under the arrangement presently under discussion, sifis will be pre - identified on the basis of some defined criteria and subjected to graded prudential surcharges and other safeguards. these are intended to eliminate the moral hazard, reduce their systemic risk potential, and should it become inevitable, allow them to fail in an orderly manner. the intent “ post crisis reforms to banking regulation and supervision – think global, act local ”, inaugural address by dr. duvvuri subbarao, governor, reserve bank of india, at the ficci - iba conference on “ global banking : paradigm shift ” at mumbai on september 7, 2010. bis central bankers ’ speeches is