So, what is this FSDC is all about?

    As we know the economic crisis in 2008 originated in US has affected many countries across the world. Many economies are experiencing slowdown. It is important for every economy to learn and prevent such crisis in future. This crisis has called for changes in the regulatory mechanisms in US. As a result US has passed a comprehensive "Wall Street Reform and Consumer Protection Act", popularly known as Dodd-Frank Act. This act provides for comprehensive financial sector regulation, consolidation of regulatory agencies by establishing "Financial Stability Oversight Council" etc...

    US is dominant and well connected economy (especially with emerging economies like India). The implementation of this "Dodd-Frank Act" will be followed by financial adjustments by other economies. Due to this regulatory consolidation in US and global slow down, pressure mounted on Indian economy to take its initiatives towards regulatory reforms to prevent such crisis in future. Thus, a super-regulatory body much like "Financial Stability Oversight Council of US" has been created in India and named as "Financial Stability and Development Council".

    The FSDC consists of,

• Finance Minister as chairman and other member includes, 
• Governor Reserve Bank of India (RBl),
• Finance Secretary and/ or Secretary, Department of Economic Affairs (DEA),
• Secretary, Department of Financial Services (DFS),
• Chief Economic Advisor, Ministry of Finance,
• Chairman, Securities and Exchange Board of India (SEBI),
• Chairman, Insurance Regulatory and Development Authority (IRDA),
• Chairman Pension Fund Regulatory and Development Authority (PFRDA).

    The main functions of this council will be, maintaining financial stability, promoting financial sector development, inter-regulatory coordination etc...

    It is important to note that the parts of financial sector like, Banking, Insurance, Securities, Provident Fund etc... were previously had its own regulators namely RBI, IRDA, SEBI, PFRDA etc... The new FSDC will serve as an institution promoting greater coordination among the financial regulators.