| "We have a coordination mechanism among regulators which primarily operates at a policy level and through technical panels at the operational level and this has to be further strengthened through exchange of information," Rangarajan said addressing the R S Bhatt memorial lecture here. |
| While for the present, "this arrangement of independent authorities may be the most workable scheme, eventually, we will also have to move towards a single authority supervising over the various financial services providers," he added. |
| The vulnerability of financial institutions to pressures comes from the maturity mismatch between liabilities and assets, he said. |
| "This mismatch may not cause any problem in the normal circumstances, but any loss of confidence could lead to destabilisation," Rangarajan said. |
| Referring to risks of contagion, he said the failure of financial institution such as a bank causes loss to depositors as also to other institutions, which are interlinked. |
| This high exposure to other financial instituions has resulted in bringing them under the regulatory regimes, he added. |
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