Rajeshwar Rao: Rethinking regulations in an interconnected financial system 

Inaugural address by Mr Rajeshwar Rao, Deputy Governor of the Reserve Bank of India, at the DoPT MDP on Financial Market Regulations at the Indian Institute of Management Kozhikode (IIMK), Kozhikode, 18 August 2025.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Participants of the 'Management Development Programme on Financial Market Regulations', Professors, ladies, and gentlemen. A very good morning to all of you!

At the outset, I would like to thank IIM, Kozhikode for inviting me here. It is a pleasure to address such a diverse gathering, ranging from policy veterans to important stakeholders across the financial landscape. The contents of programme span the issues around the regulatory framework of a diverse mix of entities operating in the financial markets including banks, securities firms, and insurance entities.

Financial markets span a wide array of products starting with money markets, G Secs, forex, equities, commodities, and derivatives. These products are traded bilaterally, over the counter, or increasingly on electronic trading platforms or on exchanges. The entities are diverse, and they are active in many of these markets. They are regulated by different regulators depending on the nature of entities and/or their activities. The markets are interconnected with spillover risks from one set of market activities into another, increasingly becoming a point of concern from the point of view of financial stability. In my remarks today, I would like to, therefore, share a few perspectives on the need for market and entity regulations and their interplay, the tools employed by the regulators and the challenges faced in framing regulations for a rapidly evolving and interlinked financial ecosystem; and conclude by sharing a few thoughts on the way forward.