The mid-term review of annual policy statement for the year 2007-08 , which was released by the RBI Governor, Y V Reddy, in Mumbai on Tuesday says, Cross-border supervision has assumed importance in view of rapid integration of financial markets as also the heightened pace of merger and acquisition activities worldwide.
In this context, the present system of informal exchange of information and supervisory cooperation amongst regulators needs to be enhanced and well structured, particularly for internationally active banks.
Accordingly, the RBI has proposed to constitute a working group to lay down the road-map for adoption of a suitable framework for cross-border supervision and supervisory cooperation with overseas regulators, consistent with the framework envisaged in the Basel committee on banking supervision (BCBS), says the document.
Further the Committee on Financial Sector Assessment(CFSA), with chairman Rakesh Mohan, co-chairman, Subbarao, constituted to undertake self-assessment of the Indian financial sector has formed four advisory panels for the assessment of Financial Stability and Stress Testing, Financial Regulation and Supervision, Institutions and Market Structure and Transparency Standards.
The advisory panels would prepare separate reports with the consultation of non-official experts.