FSLRC Report recommends size & scope of regulators as Schizophrenic

India Infoline News Service | Mumbai |

The FSLRC report emphasizes synergies in bringing together some regulators into one entity, while it suggests breaking up other regulators, Rajan says

RBI Governor Dr Raghuram Rajan today said that there are various pros and cons of having a unified financial regulator.
Speaking at the State Bank of India's, Banking and Economic Conclave in Mumbai, Rajan said, Excessive legal oversight of regulators is dangerous. The Financial Sector Legislative Reforms Committee (FSLRC) Report gives no reason to the department from status quo.
According to the Governor, there is much to like and agree with the FSLRC report. We need to ensure there is adequate finance for infrastructure sector.
There is a need to study more on FMC (Forward Market Commission) inclusion in the unified financial agency. No single regulator emerged from the financial crises, he added.
We are not in favour of judicial oversight of regulators under FSLRC. The FSLRC Report recommends the size and scope of regulators as Schizophrenic. On the one hand, it emphasizes synergies in bringing together some regulators into one entity. But in the process it suggests breaking up other regulators, with attendant loss of synergies, Rajan elaborated further.
Moving bond trading regulation away from RBI will hamper mere development and regulatory judgments should not be second guessed.


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