The Financial Stability and Development Council (FSDC) meeting held
Part of: GS-Prelims and GS-III – Economy
In News:
Recently, The Financial Stability and Development Council (FSDC) meeting was held through video conferencing.
The meeting was chaired by the Indian Finance Minister.
Key takeaways
It was noted that the COVID-19 pandemic poses a serious threat to the stability of the global financial system since its impact and timing of recovery was still uncertain.
It highlighted the need for the government and regulators to remain vigilant on financial conditions that could expose systemic vulnerabilities.
It also assured that the government and regulators would continue to provide liquidity and capital support to domestic financial institutions.
Liquidity and solvency positions of non-banking financial companies, housing finance companies and micro-finance institutions were reviewed.
Important value additions
The Financial Stability and Development Council (FSDC)
It is a non-statutory apex council under the Ministry of Finance.
It was constituted by the Executive Order in 2010.
Its constitution was proposed by the Raghuram Rajan committee (2008) on financial sector reforms.
It is chaired by the Finance Minister and its members include:
The heads of all Financial Sector Regulators (RBI, SEBI, PFRDA & IRDA)
Finance Secretary
Secretary of Department of Economic Affairs (DEA)
Secretary of Department of Financial Services (DFS)
Chief Economic Adviser
Minister of State for the Department of Economic Affairs (DEA)
Secretary of Department of Electronics and Information Technology,
Chairperson of the Insolvency and Bankruptcy Board of India (IBBI)
Revenue Secretary.
The Council can invite experts to its meeting if required.
Objectives:
To strengthen and institutionalize the mechanism for maintaining financial stability
Enhancing inter-regulatory coordination
Promoting financial sector development
Assess the functioning of the large financial conglomerates.
