In developing economies, financial sector policies are expected to be tuned to sub-serve the broad objective of ensuring growth with equity. This session will discuss the regulatory philosophy in relation to growth and development in the pre-crisis, mid-crisis and post-crisis periods with a focus on emerging market economies (EMEs). Beginning with a review of studies regarding macro-economic impact of Basel III capital and liquidity regulations, the background paper will explore a model for India for the assessment of macro-economic impact of these measures. The regulation and supervision of the financial system in India is carried out by different regulatory authorities. The Reserve Bank of India (RBI) regulates and supervises the major part of the financial system. The supervisory role of the RBI covers commercial banks, urban cooperative banks (UCBs), some financial institutions and non-banking finance companies (NBFCs). Some of the financial institutions, in turn, regulate or supervise other institutions in the financial sector, for instance, Regional Rural Banks and the Co-operative banks are supervised by National Bank for Agriculture and Rural Development (NABARD); and housing finance companies by National Housing Bank (NHB). The risks affecting the financial system are not simply aggregations of the risks of individual institutions. This so-called “systemic” aspect of risk has at least three dimensions viz. macroeconomic variables beyond the control of domestic monetary or fiscal policies, externalities and pro-cyclicality.