Single vs Multiple Financial Regulators
SINGLE Vs. MULTIPLE FINANCIAL REGULATORS
An analysis of the financial regulatory systems followed around the world
By: Sudharsan S Sandeep Kumar Natharali Razvi Vijay PJ Natarajan P Neeraj Kannoth (118) (110) (32) (59) (31) (106)
INTRODUCTION
Financial systems and financial regulators are entities setup by the government of a country to ensure the availability and flow of financial resources in a fair and lawful manner without exploitation or monopolization of the resource by individuals or organizations. The task of ensuring the availability of finance and its transference is taken up by the financial systems of a country while the task of monitoring and regulating is taken up by the financial regulator.
Financial System
A set of complex and closely connected instructions/institutions, agents, practices, markets, transactions, claims and liabilities relating to financial aspects of an economy may be referred to as a financial system. A well-developed financial system enables transfer of resources from depositors/savers to borrowers/investors/entrepreneurs and plays a crucial role in the functioning of the economy. An efficient financial system will result in an easy access to financial resources; provide financial support to socially and economically productive goals, resulting in rapid economic development.
An ideal financial system can be considered to have the following entities:
Financial Institutions: are the intermediary who facilitates smooth functioning of the financial system by making investors and borrowers meet. They mobilize savings of the surplus units and allocate them in productive activities promising a better rate of return. Were these financial institutions may be of Banking or Non-Banking institutions. Financial Markets: The main functions of financial markets are to facilitate creation and allocation of credit and liquidity; and to serve as intermediaries for mobilization of savings; and to assist process of balanced
An analysis of the financial regulatory systems followed around the world
By: Sudharsan S Sandeep Kumar Natharali Razvi Vijay PJ Natarajan P Neeraj Kannoth (118) (110) (32) (59) (31) (106)
INTRODUCTION
Financial systems and financial regulators are entities setup by the government of a country to ensure the availability and flow of financial resources in a fair and lawful manner without exploitation or monopolization of the resource by individuals or organizations. The task of ensuring the availability of finance and its transference is taken up by the financial systems of a country while the task of monitoring and regulating is taken up by the financial regulator.
Financial System
A set of complex and closely connected instructions/institutions, agents, practices, markets, transactions, claims and liabilities relating to financial aspects of an economy may be referred to as a financial system. A well-developed financial system enables transfer of resources from depositors/savers to borrowers/investors/entrepreneurs and plays a crucial role in the functioning of the economy. An efficient financial system will result in an easy access to financial resources; provide financial support to socially and economically productive goals, resulting in rapid economic development.
An ideal financial system can be considered to have the following entities:
Financial Institutions: are the intermediary who facilitates smooth functioning of the financial system by making investors and borrowers meet. They mobilize savings of the surplus units and allocate them in productive activities promising a better rate of return. Were these financial institutions may be of Banking or Non-Banking institutions. Financial Markets: The main functions of financial markets are to facilitate creation and allocation of credit and liquidity; and to serve as intermediaries for mobilization of savings; and to assist process of balanced
References: Address by Dr.Narendra Jadhav, Member of Planning Commission, India, on single vs. multiple regulator. Address by Dr. Y V Reddy, Deputy Governor of the Reserve Bank of India, at the Public Policy Workshop, at ICRIER, New Delhi on 22 May 2001. ‘The Rationale for a Single National Financial Services Regulator’, by Clive Briault. ‘What does international experience tells us about regulatory consolidation?’ by ‘Adriane Fresh and Martin Neil Baily’ ‘Financial Regulation, Monetary Policy, and Inflation in the Industrialized World’ by Mark S. Copelovitch & David Andrew Singer, 2007 ‘Part 5: Supervision & Regulation’, Federal Reserve System (USA) website The Consolidation of Financial Market Regulation: Pros, Cons, and Implications for the United States’ by Sabrina R. Pellerin, John R. Walter, Elizabeth Marshall; The Federal Reserve Bank of Richmond; Working Paper May 2009, No. 09-8