Post 2008, financial mkts gone beyond regulatory control: Sinha

Emphasising the need for better coordination among financial regulators globally, Sebi Chairman U K Sinha on Tuesday said markets have gone beyond the control of policymakers post 2008 credit crisis. Addressing the BRICS bond markets summit here, Sinha said after the 2008 financial crisis, the unconventional policies that global central banks are following have created serious challenges and uncertainties in global bond markets. The uncertainties have become so large that “today financial markets are beyond the control of national policymakers,” he opined. The Sebi chief noted that balance sheets of major banks like that of the US Fed, the European Central Bank, Bank of England and Bank of Japan, which have been following near-zero or even negative interest policies, have become too large. “These central banks have blown up their balance sheets by USD 7.2 trillion since the 2008 global credit crisis. There are also serious flaws in monetary transmission due to these unconventional policies. The broad money supply has increased by over USD 9 trillion, but the actual flow to the corporate sector is hardly USD 1.8 trillion,” Sinha said.