Government of India Volume I: Analysis and Recommendations

egulatory agencies. In such a situation, the FSDC will:
SYSTEMIC RISK
◮ Provide and conduct data analysis and research to seek to understand and resolve
the crisis;
◮ Assist the regulators and members of the FSDC in their efforts to resolve the crisis;
◮ Implement any system-wide measures such as the release of the counter-cyclical
capital buffer;
◮ Discuss and assist in the implementation of extraordinary methods of resolution
for certain entities, such as SIFIs, if required; and
◮ Initiate an audit of all actions leading up to, and taken during, a crisis.
For efficient crisis management, the Central Government should have the ability to
tap into the data and knowledge at FSDC and particularly, the FDMC. Second, crisis management
will be improved by the presence of the resolution corporation and system-wide
measures such as the release of the counter-cyclical buffer. Finally, the Ministry of Finance
will be required to consult with the FSDC before making any decisions in relation to fiscal
assistance, or other extraordinary assistance to financial service providers. The use of
these powers should be restricted to emergency situations, and the actions of the FSDC
should be subject to a post-crisis audit so as to ensure accountability.
98 FINANCIAL SECTOR LEGISLATIVE REFORMS COMMISSION