ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Beyond Melting the Pot: On the Financial Sector Blueprint

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.

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