Maintaining financial stability is perhaps most important in the reform era. It must be admitted that is is because of financial sector reform undertaken since 1990 that financial stability is more likely to be achieved. Macroeconomic balance minimizes the various risks. Financial crises in several countries in the late 1990s inflicted heavy cost on their economies. They also exposed the fragilities of their financial systems and paved the way for macro-economic restructuring. Globalisation no doubt has brought a number of benefits. But on its flip side, it has brought in some new types of risks for economies like ours. Cross-border flows, so much a part of globalization, have exacerbated the possibliites of contagion. Three key areas have engaged the central banks in its task of ensuring financial stability are : *Maintaining an uninterrupted payments and settlements system; *ensuring a level of confidence in the financial sector;and *checking excess volatility that can harm economic activity. Across the world, in every economy, banks and capital markets have both played a critical role in connecting savers with investors and thereafter allocating resources among competing users effenciency. Thanks to capital market reforms, stock market governance and procedures have become more transport and investor-friendly. This issue of "Business Vision" highlights the various challenges which also construe opportunities to Financial Sector in India.