In a discussion on the global economic turmoil and the need for financial regulation, ex-chairman of the Securities and Exchange Board of India (Sebi) M Damodaran today said that the financial world is moving in a direction where in the name of regulation ‘sinister’ schemes are being plotted. “In the Indian context, the finance ministry wants to muscle its way in Sebi as perhaps the ministry feels that they lost out on some of the action when the going was good. We need to stop such insidious moves,” Damodaran said in Mumbai.

Damodaran emphasised on the need for regulation, however, he maintained that there wasn’t any urgency for having more regulatory bodies. “Government after having created functionally autonomous bodies is now taking retrogressive steps. We don’t need new regulatory bodies or new regulations just because of one incident.” Referring to the Satyam scandal, he said corporate India was vocal about more regulations after the company’s CEO mis-reported its cash balance and led it to a virtual bankruptcy. “So long as greed plays a role in human conduct, an outside and independent body will be needed to write a code a conduct. However, there is no need to have new bodies and new rules. The Department of Telecommunication has repeatedly in the past taken decisions in the jurisdiction of the Telecom Regulatory Authority of India (TRAI), which is a sinister thing.”

The government of India is ‘bluffing’ that new regulatory authorities will solve problems. “Earlier it was a case that if people had a problem, the government used to think of providing a solution. But today if people have a problem the government thinks of giving them an institution,” said Damodaran.

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