Policy Issues 193
None of this exists in India today. All elements of the BCD Nexus are riddled
with bans on trading, restrictions on market access, rules that prevent player
x from trading in market y, etc. In the absence of the BCD Nexus, Indian
finance is lacking in many core functions of finance, ranging from fund-raising
to information signals and risk management. This is a core failure of India’s
financial markets.
2
Surrounding the financial markets are the financial firms. This is another
area where India has major weaknesses. Financial firms are unable to organize
themselves effectively, thanks to the silo structure of regulation that has come
up. In addition, most regulated financial firms are forced to do a large array of
inefficient things by regulators. ...