Perspectives on risk and governance

Improper understanding and inefficient management of risk coupled with gaps in governance framework are considered to be major factors behind the outbreak of the Global Financial Crisis. This article highlights the gaps in the risk management and governance framework which led to the crisis and delineates international initiatives in building robust governance systems. The article also analyses the impact of new regulations on the economic growth and bank profitability which is the subject matter of intense debate currently and underscores the necessity of adopting Basel III by EMDEs. Highlighting the Reserve Bank of India's policy initiatives in mitigating the impact of global crisis, the paper discusses some contemporary issues in Basel III implementation in India.