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Despite hopes bandied about by businessmen, there never was much prospect of this leftist government bringing economic reform to India's statist financial sector or protected retail industry.But even when the government has tried bits of reform it has often got stuck.
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The commission's proposal should make it easier to protect retail banking customers in a crisis.
THE BIGGEST QUESTION for supervisors is how to protect retail investors from financial wizardry.
Funds placed with P2P lenders are not covered by the state-backed guarantees that protect retail deposits in banks.
For the few who knew about them, their proposals were helpful in designing the "ring-fence" being used to protect retail deposits today.
Full separation – ie into separate entities with restrictions on cross-ownership – might provide the strongest firewall to protect retail banking services from contagion effects of external shocks.
Darling told the Commons that he had decided to protect "retail depositors" because they could not be expected to know that there was any reason not to trust Icesave and its parent company, Landsbanki.
But they can partially re-create, and preserve what is left of, the independent retail sector through, for example, tax concessions; a community right to take over or find buyers for threatened businesses; and enhanced powers for local councils to protect retail competitiveness.
The irony here: heightened regulations intended to protect retail investors may only hurt them.
In spirit, these regulations are intended to protect retail investors; in effect, they will make capital-raising more time-consuming and more expensive for entrepreneurs.
Proposed rules create a new kind of financial intermediary, called "funding portals," that aren't subjected to the same requirements as FINRA-regulated broker-dealers, and include a vast web of provisions intended to protect retail investors who, for the first time in recent history, would be given the opportunity to invest in private companies.
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CEO of Professional Science Editing for Scientists @ prosciediting.com