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Lacunae in Financial Regulatory Framework Vis-?-Vis Financial Repression

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  • Gurbachan Singh

    (Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi)

Abstract

This article makes four points. First, it suggests regulation of entry into the finance profession, whose tasks would include prescribing? a portfolio choice for (financially) uninformed investors. Second, it suggests that the government should encourage information collection to help ensure informational efficiency of markets. Third, it introduces a new academic concept - optimal noise in financial markets. Fourth, in the context of financial intermediaries, given that deposit insurance, lender of last resort, capital adequacy, and supervision of banks are in place, there is no need to impose the following beyond reasonable prudential norms: (a) cash reserve ratio requirement, (b) statutory liquidity ratio requirement, and (c) barriers to entry.

Suggested Citation

  • Gurbachan Singh, "undated". "Lacunae in Financial Regulatory Framework Vis-?-Vis Financial Repression," Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi Discussion Papers 09-10, Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi, India.
    • Handle: RePEc:ind:citdwp:09-10
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    File URL: https://www.jnu.ac.in/sites/default/files/regulate.pdf
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    References listed on IDEAS

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    1. Fama, Eugene F., 1980. "Banking in the theory of finance," Journal of Monetary Economics, Elsevier, vol. 6(1), pages 39-57, January.
    2. James Dow & Gary Gorton, 2006. "Noise Traders," NBER Working Papers 12256, National Bureau of Economic Research, Inc.
    3. Shleifer, Andrei, 2000. "Inefficient Markets: An Introduction to Behavioral Finance," OUP Catalogue, Oxford University Press, number 9780198292272.
    4. Bernanke, Ben S, 1983. "Nonmonetary Effects of the Financial Crisis in Propagation of the Great Depression," American Economic Review, American Economic Association, vol. 73(3), pages 257-276, June.
    5. Raghuram G. Rajan, 2008. "Draft Report of the Committee on financial Sector Reforms," Working Papers id:1463, eSocialSciences.
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    Cited by:

    1. Gurbachan Singh, 2012. "Financial Stability Reports (FSR) of the Reserve Bank of India (RBI), March and December, 2010: A Critical Review with a Long-term Perspective," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 6(1), pages 27-46, February.
    2. Gurbachan Singh, 2012. "Serious Economics and Simple Books," Review of Market Integration, India Development Foundation, vol. 4(1), pages 111-130, April.

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