Globally there is widespread unanimity among regulators, policy-makers, researchers, and practitioners in the world of Finance, on the need for a new financial architecture, especially in the aftermath of the Global financial crisis of 2007–2008. Global economic realities have changed significantly since the Great Depression of 1929, around which the prevalent financial architecture was conceptualised. As regulatory frameworks put in place as a fallout of the Great Depression were gradually dismantled, by the 1990s, the global financial markets, particularly in the developed world, were subject to very little regulation. However, markets in countries like China and India, were still under significant state regulation, and witnessed a persistent demand for more deregulation and a need for a sustained higher growth rate of about 8 -9% going forward. Emerging economies such as these found the standard financial architecture inadequate to sustain this growth level.

To address this inadequacy, it is now mostly accepted that new financial models would need to emerge, keeping in mind the multiplicity of socio-economic realities and requirements that exist across the globe. The possible need for an integrated new financial architecture integrating the banking sector, the mutual funds, and the non–banking finance sector is fast gaining credence, as no one segment of the financial sector will be able to sustain the required growth rate or a shock, if it were to come. The organisations that collate and provide all the relevant financial information would also possibly need to be formally included in this new order as, going forward, information will be a key driver in the financial sector.

This feature on India Emerging – New Financial Architecture explores some of these issues with reference to the Indian context, in a round table discussion. Chaired by Prof R Vaidyanathan, Professor, Finance & Control, IIMB, the panel includes Mr T Keshav Kumar, Chief General Manager, Commercial Banking, State Bank of Mysore; Mr Imtaiyazur Rahman, Chief Financial Officer, UTI Mutual Fund; Mr Sriram Ramnarayan, Country Head, Financial Markets, Thomson Reuters; and Mr G. S. Sundararajan, Group Director, Shriram Group.