Asit Ranjan Mishra Mint THU, OCT 24 2013. 11 31 PM
Chidambaram asks financial sector regulators to be prepared for US tapering
New Delhi: Finance minister P. Chidambaram has asked financial sector regulators to use the time available till the US Federal Reserve starts reducing its bond-buying programme to address economic imbalances so that any adverse impact on the Indian economy could be avoided.
In September, the US Fed refrained from reducing the $85 billion pace of monthly bond-buying, saying it needs more evidence of lasting improvement in the economy and warning that an increase in interest rates threatened to curb the expansion.
The Financial Stability and Development Council (FSDC) chaired by the finance minister met on Thursday and also deliberated on the implementation of the recommendations of the Financial Sector Legislative Reforms Commission (FSLRC) and the steps to be taken by regulators.
The meeting attended by all financial sector regulators, including Forward Market Commission chairman Ramesh Abhishek and finance ministry officials.
The council decided that all the financial sector regulators, including FMC, will finalize an action plan for implementation of all the FSLRC principles relating to regulatory governance, transparency and improved operational efficiency that do not require legislative action.
“As regards to legislative recommendations, it was decided to analyse the public comments and feedback to further fine-tune the draft Indian financial code. It was also decided that action should be taken for finalizing the road map for creation of new institutions such as Resolution Corporation, Public Debt Management Agency, Financial Sector Appellate Tribunal and Financial Data Management Centre,” the finance ministry said in a statement.
The council also discussed the corporate distress redressal mechanism laid out under the new companies law and identified the role of regulators and the government to implement these provisions to prevent, as also to take remedial measures on, corporate distress.
The council was apprised of the progress made by the FSDC sub-committee and its technical groups in a number of areas such as drawing up a consolidated template for a bird’s eye view of financial inclusion across different segments of the financial sector, remedial measures to address the deteriorating asset quality of public sector banks, and formation of state-level coordination committees to curb the menace of unregulated companies collecting public funds, the ministry statement said.
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