All set for super regulator in financial sector

MUMBAI: The government has set the ball rolling for the creation of a super regulator in the financial sector with the proposed creation of Financial Stability & Development Council.

Announcing his budget, financial minister Pranab Mukherjee said that without prejudice to the independence of the regulators, the government would set up a Financial Stability & Development Council whose job would be to monitor conglomerates and improve coordination among financial regulators with a view to preventing future financial crises.

The central bank governor D Subbarao had called for the creation of such a body in the past by giving statutory power to the existing High Level Coordination Committee (HLCC) on financial markets. The committee which is headed by RBI governor includes heads of Sebi, IRDA, PFRDA, and the finance secretary. If the HLCC is formalised as the FSDC, the RBI will have a larger say in the regulation of the financial sector.

A super regulator in this form is being tried out in the UK as well.