New Delhi, Oct 12 (IANS) Finance Minister Pranab Mukherjee Tuesday discussed with top financial regulators, including Reserve Bank Governor D. Subbarao and SEBI Chairman C.B. Bhave, the setting up of the Financial Stability and Development Council (FSDC) to deal with inter-regulatory issues.
‘I had a very constructive discussion with regulators. It is a step forward in creation of FSDC,’ Mukherjee told reporters here after the meeting.
He said the council would engage in macro prudential supervision of the economy, including the functioning of large financial conglomerates and address inter-regulatory coordination issues, without prejudice to the autonomy of regulators.
The FSDC, to be headed by finance minister, will will have one sub-committee, headed by the RBI Governor.
RBI Governor D Subbarao had earlier voiced concern over the setting up a super-regulator, saying it would undermine the central bank’s autonomy.
However, finance minister has reiterated that the council was not aimed at undermining the autonomy of any regulator.
‘It was agreed that with a view to strengthen and institutionalise the mechanism for maintaining financial stability and development, the central government will set up the apex council,’ the finance ministry said in a statement.
The council will also focus on financial literacy and financial inclusion and look into issue relating to financial development from time to time.
Mukherjee had in his budget had proposed to set up FSDC to strengthen and institutionalise the mechanism for maintaining financial stability.