Brics and straws

Brics and straws

Brics Bank has its own limitations, and let us hope it will...
Much ado about execution

Much ado about execution

Effective delivery must be brought to the centre of policy-making...

Financial systems can’t regulate self: Nobel laureate

Jan 05 2013, 00:48 IST
Comments 0
SummaryNobel price winner and former World Bank economist Joseph Stiglitz doesn't believe that financial systems can self-regulate.

Nobel price winner and former World Bank economist Joseph Stiglitz doesn't believe that financial systems can self-regulate. According to Stiglitz, financial systems even in advanced economies are largely imperfect and need to be constantly under regulatory vigil.

“Restrictions on the size and ranges of bank activities and the interconnectedness of banks would not only increase systemic stability, it would also enhance competitiveness,” he said on Thursday.

Citing the bust of derivatives market that set off the financial crisis and the latest scandal in fixing of the London Interbank Offered Rate, Stiglitz said that markets are imperfect and non-transparent. He also said that the shadow banking system which includes investment banking, non-banking finance companies must be tightly regulated as the impact on the financial stability from shadow banks has increased

Interestingly, Stiglitz advocated limited independence to central banks and said that the Reserve Bank of India has done far better than the US Federal Reserve even if its autonomy was far less than its US peer.

“There is no such thing as truly independent institutions. All public institutions are accountable, and the only question is to whom,” he said.

Ads by Google

More from Money & Funds

Reader´s Comments
| Post a Comment
Please Wait while comments are loading...