Financial Crises and the Prudential Regulations: Theory, Practice and the Way Forward

The Indian Banker, Indian Bank Association, ISSN 2349-7483. Volume V, Issue 6, January 2018. pp 14-18, https://www.theindianbanker.co.in/

10 Pages Posted: 6 May 2021 Last revised: 6 Jul 2021

Date Written: January 1, 2018

Abstract

Inadequate regulations or failure of regulations to keep pace with financial innovations could have been reasons for financial crises but equally critical contributing factors for financial distress have been inadequate internal control, false assumptions about market and liquidity, and lack of due diligence processes. It is obvious, therefore, that the regulations may strengthen but cannot substitute the internal controls and risk management framework at the level of the financial institution.It is a challenge is to incentivize the financial market participants to join the regulators in pursuit of effective risk optimization and strengthening of the financial stability. Collaboration and coordination are needed between the regulators and the regulated entities for achieving the common good of a stable and efficient financial system.

Keywords: Financial Crisis, Regulations, Banking

JEL Classification: G21

Suggested Citation

Srivastava, Ashish, Financial Crises and the Prudential Regulations: Theory, Practice and the Way Forward (January 1, 2018). The Indian Banker, Indian Bank Association, ISSN 2349-7483. Volume V, Issue 6, January 2018. pp 14-18, https://www.theindianbanker.co.in/ , Available at SSRN: https://ssrn.com/abstract=3837232 or http://dx.doi.org/10.2139/ssrn.3837232

Ashish Srivastava (Contact Author)

Reserve Bank of India ( email )

University Road
Pune 411016, Maharashtra
India

CAB, RBI, Pune ( email )

University Road, Pune
Maharashtra
India

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