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Dynamics and regulatory system of Indian financial markets: A dialectic view

A.K. Sharma (Department of Management Studies, Indian Institute of Technology Roorkee, Roorkee, India)
Ashutosh Vashishtha (Department of Management Studies, Indian Institute of Technology Roorkee, Roorkee, India)

Journal of Financial Regulation and Compliance

ISSN: 1358-1988

Article publication date: 31 July 2007

7779

Abstract

Purpose

This paper aims to trace the evolution of Indian financial market structure and regulation, in the broad dialectic sense and to suggest a consolidated, holistic regulatory model.

Design/methodology/approach

The paper sketches the evolution of Indian financial market structure and its regulation in terms of dialectic cycles. The first cycle extending practically over four decades, from the 1950s to the 1980s, was a period of foundation, expansion, and policy introspection. The decade of the 1990s marked the commencement of the second cycle – a period of liberalization and emergence of financial conglomerates. The Indian financial system has since completed one full circle in the dialectic process and is now passing through the last phase (synthesis) of the second cycle. Based on this dialectic approach, a consolidated and holistic regulatory model has been developed and suggested.

Findings

The paper concludes that, from a regulatory perspective, the recent developments in the financial sector have led to an appreciation of the limitations of the present segmental approach to financial regulation and favors adopting a consolidated supervisory approach to financial regulation and supervision, irrespective of its structural design.

Originality/value

This paper will be of value to financial regulators, financial intermediaries and investors across all the countries, developed as well as developing. It will facilitate and guide in the process of regulatory restructuring and strengthening the overall health of the financial markets.

Keywords

Citation

Sharma, A.K. and Vashishtha, A. (2007), "Dynamics and regulatory system of Indian financial markets: A dialectic view", Journal of Financial Regulation and Compliance, Vol. 15 No. 3, pp. 275-302. https://doi.org/10.1108/13581980710762282

Publisher

:

Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited

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