rewrite and streamline the financial sector laws, rules and regulations to bring them in harmony with india ’ s fast growing financial sector. ix. concluding thoughts i have presented my random thoughts on the issues of risk and governance. i have also attempted to provide you the flavour of regulatory response to the crisis, and the issues surrounding implementation of basel iii both from the international and indian perspectives. risk and governance are still evolving concepts and i am sure deliberations such as these would provide valuable inputs for policy formulation. i congratulate isb and deloitte for their initiative of organising this summit and wish the deliberations all success. thank you references : caruana, jaime ( 2012 ), “ shareholder value and stability in banking ; is there a conflict? ” danielsson, jon, “ blame the model ”, journal of financial stability 4 derman, emanuel ( 2011 ), “ models behaving badly ”, free press diebold, francis x, doherty, neil a, herring, richard j ( 2010 ), “ the known, the unknown and the unknowable in financial risk management ”, princeton university press dowd, kevin and hutchinson, martin, “ alchemists of loss ”, times group books group of thirty, “ toward effective governance of financial institution ” haldane, andrew g ( 2012 ), “ tails of the unexpected ” institute of international finance ( 2009 ), “ risk models and statistical measures of risk ” mohan, rakesh ( 2007 ), “ india ’ s financial sector reforms – fostering growth while containing risk ” bis central bankers ’ speeches paulson, henry m ( 2010 ), “ on the brink ”, business plus, hachette book group. rebonato, riccardo ( 2007 ), “ plight of the fortune teller ”, princeton university press senior supervisors group ( 2008 ), “ observations on risk management practices during the recent market turbulence ” - - - - - - - - - ( 2009 ), “ risk management lessons from the global banking crisis of 2008 ” the world bank and international finance corporation ( 2010 ), “ bank governance : lessons from the financial crisis ”, note number 13. triana, pablo ( 2009 ), “ lecturing birds on flying ”, john wiley & sons, inc. bis central bankers ’ speeches

prolific, especially over the last decade. for the world taken together, the ratio of foreign assets and foreign liabilities to gdp rose from 133 per cent in 1994 to over 300 per cent in 2008. 2 calculations based on imf direction of trade statistics, june 2010. calculations based on imf balance of payments year book, 2010. bis central bankers ’ speeches 15. the impact of globalization of labour was by far more striking. emerging asia added nearly three billion to the world ’ s pool of labour as it integrated with the rest of the world over the last two decades thus hugely improving its comparative advantage. together, the three dimensions of globalization – trade, finance and labour – helped emerging asia multiply by a factor its exports to the advanced economies. the result was large and persistent current account surpluses in the asian economies and corresponding current account deficits in the importing advanced economies. these global imbalances combined with developments in the financial sector to brew the crisis to its explosive dimensions. 16. so, where do we go from here? the g - 20 is now actively engaged in the challenging task of redressing structural imbalances in the global economy. at their pittsburgh summit in september 2009, the g - 20 leaders agreed on a “ framework for strong, sustainable and balanced growth ” and committed to a “ mutual assessment process ” ( map ) which is a peer review of each country ’ s progress towards meeting the shared objectives underlying the framework. recognizing that global imbalances, which had narrowed during the crisis, started widening again in the exit phase, the g - 20 resolved that promoting external sustainability should be the focus of the next stage of the map and entrusted this task to a framework working group ( fwg ). 17. india is privileged in co - chairing, together with canada, the framework working group for managing the task of developing the indicative guidelines for assessing and addressing persistent global imbalances. the success of this initiative is critical for redressing the problem of global imbalances. 18. in moving forward on finding a sustainable solution to global imbalances, we will be guided, individually at the country level and collectively at the g - 20 level, by insights from academic research. it is in this context that work of insightful economists like prof. obstfeld will be important. ladies and gentlemen, please join me in welcoming prof. maurice obstfeld to deliver the 12th l. k. jha memorial lecture. bis central bankers ’ speeches