| | The draft report of the Committee
on Financial Sector Reforms
has proposed a financial sector
blueprint for creation of a level
playing field, introduction
of missing markets, greater
participation of foreign investors
and consolidation of regulation
of trading under one roof. While
many of the recommendations
have merit, the broad approach
to reduce regulatory costs,
overlaps, silos and gaps appears
to be characterised by “melting
the pot” to create a homogeneous
financial system. This runs the
risk of putting financial stability
to strain, as also of enhancing
institutional and market
inefficiencies. The quest for
creating more efficient and liquid
markets needs to focus beyond
melting the pot to addressing the
core aspects of liquidity, efficiency
and stability, while retaining
heterogeneity.
|
