ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Perfect Market Puzzles

With the problem of sovereign debt everyone seems to assume that someone else, often referred to as 'the market', has figured out the solution. But even in the face of mounting billions in default and growing coordination problems, it looks to us as if nothing of the sort has occurred. The mechanism of the invisible hand is magical indeed - when it operates at all. But its operation is not safe to assume. Not even under the best possible set of conditions.

WTO and Indian Banking Sector: The Road Ahead

Increasing globalisation of trade under the WTO has provided India with a new opportunity as well as a necessity to strengthen her efforts at reforming her domestic financial sector. The real issue before India is how to obtain the best deal for herself in the current round of negotiations while seeking to reform her financial sector. In this paper the authors have identified six major issues that will come up for consideration in this round of WTO negotiations and made recommendations for India's response strategy by appropriately drawing lessons from the global experience in the opening up of the banking sector.

Organisation of Regulatory Functions:A Single Regulator?

Since the beginning of the financial sector reforms in early 1990s, boundaries between products and intermediaries have been blurring rapidly. The entry of several large government-owned as well as non-governmental financial sector participants in a variety of related domains such as securities trading, investment banking, commercial and retail banking, insurance and asset management which are regulated by independent bodies has posed some unique supervisory challenges for the Indian financial system. The paper attempts to argue that such a system of regulation not only artificially fragments the financial markets but also exposes the system to the very real danger of participants behaving as mini-super-regulators as they seek to optimally allocate capital dynamically between these fragmented market

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