post global financial crisis era, the gfsn has grown significantly with increased accumulation of reserves by countries, and increase in various bilateral and multilateral swap arrangements. global reserves grew from about us $ 2 trillion in 2000 to about us $ 12 trillion by the end of q2 of 2017 about 60 per cent of which are held by emes. however, according to the fund ’ s assessing reserves adequacy ( ara ) metric, many emes ( especially in eastern europe and latin america ) fall short of the range of 100 – 150 per cent of the composite metrics that are considered adequate for precautionary purposes. bilateral swap lines between central banks expanded dramatically during the crisis and have further increased since then. the bilateral swaps are dominated by china ’ s extensive network of renminbi swap lines − 30 swap lines in place at end - 2015 valued at us $ 500 billion. brics countries have established a us $ 100 billion multilateral currency swap arrangement aiming to provide regional short - term liquidity and to address balance of payments difficulties. other regional financing arrangements ( rfas ) that have emerged are eurasian fund for stabilization and development ( efsd ) with contributions of us $ 8. 5 billion, arab monetary fund ( amf ) and the latin american reserve fund ( flar ). 16. with every new tail event, however, the churn becomes larger, the volatility ever higher, threatening to overwhelm the modest defences that emes are able to muster. it is in this context that i would draw your attention to the stark asymmetry prevailing in the provision of swap lines by systemic central banks. in fact, i would go as far as describing the situation as a virtual “ apartheid ” by which systemic central banks protect themselves and their self - interest. meanwhile, emes that are at the receiving end of global financial turbulence are systematically denied access. the time has come to end this sectarian approach and the access to swap lines be equally available. while emes have shown a degree of resilience to the turmoil of recent years, they are vulnerable to liquidity and bridge financing gaps that are transitory but debilitating. access to swap lines will help them manage these risks better and prevent them from assuming systemic proportions, thereby threatening global financial stability. we must learn from the lessons of the global financial crisis and act expeditiously and comprehensively to establish a broader swap network. in its absence, the macroeconomic environment of each

and other stakeholders all benefit with higher quality information to make decisions. 6. with globalisation, it is imperative for banks in emes to adhere to standards emanating from the global standard setting bodies. while challenges remain in adopting standards like ifrs in emes, we welcome the forward looking provisioning framework. banks generally tend to delay provisioning for bad loans until cyclical downturns have already set in and it is too late, possibly magnifying the impact of the economic cycle on banks ’ income and capital. in such circumstances, providing for and recognising actual and potential loan losses at an earlier stage in the credit cycle could potentially reduce procyclicality and foster financial stability. ( ii ) financial regulation and suddenness of crisis incidence : need for regulatory intervention to be more anticipatory and data - based. 7. in the context of financial stability, acceptable regulation should have three broad characteristics : firstly, regulation ought to be predictable. a regulation susceptible to forbearing instincts carries the concomitant chance of risk inducing behaviour by stakeholders. second, regulation should aim to shoehorn internal governance mechanisms of the regulated entities in an incentive compatible way. finally, it should aim to address information asymmetry between the key stakeholders since the lack of information often leads to herd behaviour, thus precipitating crises. 8. backward looking regulation attempts to address gaps in regulation in one sector, region, and nation ; but given the complexity and inter - connectedness of the financial system, activity swiftly shifts to another sector, region or nation and builds financial excesses. however, the next threat to financial stability may come from quarters that regulators are completely unaware of. thus, forward - looking regulations are required to tackle such unforeseen risks. with the advent of big data analytics, cloud computing and artificial intelligence, we are at a stage where data can be used to model future events with certain confidence intervals, and our regulations can potentially be structured to deal with such events. the recent thrust on two areas - cybersecurity and fintech - is a case in point. a decade back, few bankers or policymakers talked about this threat. today these are identified as major risks to the financial system. 9. the allergy to intrusive regulation pre - crisis has been overturned into a necessity in the post - crisis period across advanced economies ( aes ) and emes. in the post - crisis hyper - active regulatory environment, it is