Conference Design

The financial system is crucial for the optimal allocation of capital and for the smooth functioning of the economy, but it is not always obvious that the financial system will do so efficiently and effectively. One can conceive of situations in which the financial system may evolve in a manner that creates frictions in the capital allocation process. Therefore, the optimal design of the financial system becomes an important topic for research and debate, with a view to ensure that the financial system is able to fulfil its potential vis-à-vis the real economy.

Committees and experts have, at various points in time, deliberated upon the need to rethink various design aspects of the Indian financial system, but these discussions have usually been iterative i.e. they are rooted in the present financial system and look to make incremental changes and improvements. The proposed IFMR Conference aims to create a unique opportunity for key individuals to reflect on financial system design issues from a clean-slate, first principles standpoint.

Session Format

In order to arrive at design issues that span multiple institutional structures and regulatory regimes, the organising principle for the conference will be functional, other than the introductory session (by Dr. Nachiket Mor) and the concluding session.

In particular, three functions have been identified as being over-arching: Origination, Risk Transmission and Aggregation, and will each have separate sessions. Each of these sessions will begin with a theme paper presentation, followed by a visioning exercise (in small groups) for the relevant function, brief presentations by small groups, and will conclude with identification of pathways to achieve those specific visions. For example, the Origination session might ignite the vision of a unified and consistent customer protection regime that will then lead us to specific proposals (legislation, regulation, innovation and research) that are likely to be instrumental in the realisation of that vision.

The lead presenters are Dr. Susan Thomas (IGIDR) for the Origination session, Dr. Raghu Sundaram (NYU) for the Risk Transmission session and Dr. Ajay Shah (NIPFP) for the Risk Aggregation session.

Conference Agenda