The country has weathered the economic crisis better than most countries because the Reserve Bank of India (RBI) insists on a more hands-on approach and was not afraid to implement strict regulations during the boom years. This is in stark contrast to the U.S. Federal Reserve which tends to be more reactive instead of proactive with new regulations. The differences in approach helps explain why the U.S. has more exaggerated booms and busts, while India’s busts do not run as deep. The RBI limited asset securitization, a technique that allows banks to group and sell off loans so that risk to the originating bank is reduced. Though banks complained the rule reduced liquidity, the restriction forced banks to be careful with capital and make prudent loans since they, ultimately, had to bear the risk. Another instance where the RBI showed some muscle was in restricting banks from making loans for the purchase of undeveloped land after it was obvious a real estate bubble was forming. These rules are the primary reason why Indian banks have managed to escape relatively unscathed compared to Western institutions when the bubble burst last year.