General Motors Corporation
The regulation of capital market is evolving in ways that will continue to provide for the efficient managing and monitoring of the global markets. “Although the difference between success and failure in any endeavor has always been the people involved, today the human factor is even more important. ” said E. M. Estes, once the president of General Motors Corporation. The modern emerging financial landscape has intensified the competition and spurred growth while spawning new risks and challenges.
This has led to increasing involvement of regulatory authority to monitor of the capital markets while reducing the element of risk to protect the investors and thereby broaden the participation base for the development of capital markets. Certain trends have unleashed vast new opportunities for growth. But they have also accentuated risks within the financial systems, posing challenges for both financial institutions and regulators, such challenges include: Technological advancement. Convergence of activities. Consolidation of institutions. Globalization of markets.
Intensification of competition. Sound growth, development and advancement of capital markets depend upon the three pillars which are: Self governance. Market discipline. Official Oversight. Sound regulation needs to be: Risk focused. Responsive. Consistent. Adaptive. Transparent. Stress should be on: Improving the capital adequacy frame work. Installation of prudential safe guards. Dependence over e-regulations. “Analyze the markets from beyond the markets, not as the marketer sees it, who participates in it, but as an external spectator sees it, who views it from without.
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Therefore, they see only the bare outward show which alone can disclose itself into an un-implicated observer. They see the bare outward behavior and are blind to the norm which animates it and regulates it and confers upon it, for the person who enacts it, its social meaning. ”— J. F. A Taylor, 1966. Effective regulation must not only deal in an appropriate way with the relevant substance but also must be easy to implement and monitor. The design of a regulatory strategy is fundamental for the effectiveness of regulation. This is even more crucial in the case of internal market policies since they cover a broad range of sectors and topics.
Their implementation often corresponds to the front layers of administration. Regulation should be simple, consistent across several sectors and easily enforceable. Where possible regulatory designs should evolve towards performance based regulatory systems where the required outcomes are specified but there is flexibility on the means of achieving such outcomes. Under this scenario monitoring is easier since it only requires the control of the outcomes also; governments and companies have more flexibilities upon the way to achieve the required outcomes.