Stability to whom?

Dr Y V Reddy on need of new regulatory structure in world financial system (perhaps rightly said so):

• The whole world talks about introducing stability in the regulatory framework. Remember, the instability came in from half a dozen countries only—the US, UK, EU area. Instead, there was talk about a world regulatory framework, even as most countries were just affected by the contagious effect and their financial system was not in a mess. So why are we creating prescriptions for medicines for mistakes created in some other countries? This just shows the dominance of the thinking itself.

• Secondly, every regulation is being talked about in the context of emphasising stability, whereas for many countries like India, want to have growth. So how the financial sector will help growth and how to structure regulation to help growth— that’s more important for developing countries. But you do not find that type of discussion even in G20 debates. Frankly, in terms of analytical framework for global public policy, the impression is that there were some loopholes here and there. You fix them and things will be alright, and that’s the way things have been working since then. There are a lot of fundamental things that have to be addressed and I don’t think there is much evidence on that.