five years, the fed and, dare i say, many other central banks have become much more interventionist. i do not think this is a particularly healthy state of affairs for the central banks or our economies. the crisis in the u. s. has long passed. with a growing economy and the fed ’ s long - term asset purchases coming to an end, now is the time to contemplate restoring some semblance of normalcy to monetary policy. in my view, the proper role for monetary policy is to work behind the scenes in limited and systematic ways to promote long - term growth and price stability. but since the onset of the financial crisis, central banks have become highly interventionist in their efforts to manipulate asset prices and financial markets in general as they attempt to fine - tune economic outcomes. this approach has continued well past the end of the financial crisis. while the motivations may be noble, we have created an environment where “ it is all about the fed. ” market participants focus entirely too much on how the central bank may tweak its policy, and central bankers have become too sensitive and desirous of managing prices in the financial world. i do not see this as a healthy symbiotic relationship for the long term. if financial market participants believe that their success depends primarily on the next decisions of monetary policymakers rather than economic fundamentals, our capital markets will cease to deliver the economic benefits they are capable of providing. and if central banks bis central bankers ’ speeches do not limit their interventionist strategies and focus on returning to more normal policymaking aimed at promoting price stability and long - term growth, then they will simply encourage the financial markets to ignore fundamentals and to focus, instead, on the next actions of the central bank. i hope we can find a way to normalize the role of monetary policy to one that is less interventionist, less discretionary, and more systematic. i believe our longer - term economic health will be the beneficiary. bis central bankers ’ speeches

reserve bank on a quarterly basis. as per the reserve bank ’ s composite hpi, house prices have nearly doubled since 2008 – 09 ( chart 4 ). bis central bankers ’ speeches furthermore, the reserve bank is also developing a housing asset price monitoring system covering such details as ltv ratio, emi to income ratio and price to income ratio based on housing loan data from select cities collected from select banks and hfcs. way forward let me now conclude with some thoughts on the way forward. first, besides institutional finance, self financing from private sources, withdrawals from provident funds and loans from employers are important sources of housing finance. the available national accounts data on households ’ investment in physical assets do not distinguish between pure households and propriety & partnership concerns. hence, there is a need to develop a distinct component of pure households ’ investment in residential construction for a more comprehensive measure of contribution of housing to households ’ net worth. second, both the nhb - residex and rbi - hpi, besides providing a cross - check on house prices, facilitate a comparison between final market prices and registration prices. the coverage of the cities needs to be expanded to develop a representative all - india urban house price index. third, in order to enhance the information base of the housing finance market, the reserve bank should place in public domain its detailed database on house price monitoring system. fourth, keeping in view the recent moderation in expansion of institutional finance for housing, an important question is whether securitization would help in expanding housing finance and also address the problem of procyclicality, thereby stabilizing house prices. as the us experience with the sub - prime crisis shows, securitization could impart liquidity and enhance efficiency only when it leads to creation of simple structures easily understood by market participants and regulators. given our early stage of development of the mortgage market, there is scope for housing disintermediation both through more active involvement of apex refinancing institutions like the nhb and also through development of simple securitized mortgage products backed by adequate regulatory safeguards. fifth, in order to mitigate risks in housing finance, besides application of macro - prudential regulations, there is a need to develop a fixed rate housing loan product of longer maturity. thank you. bis central bankers ’ speeches