The Hindu Business Line : ‘No single factor behind indices movements’

Directly linking any fall in Indian equity indices to the US Sub-Prime market crises would be an “over-simplification” of issues, according to the SEBI Chairman, Mr M. Damodaran.

“To relate the movement of indices to any one factor, especially if that is an external factor, would be over-simplification. At the end of every market day, several explanations are there for why share prices went up and down,” Mr Damadoran told reporters here, when asked whether the sub-prime market crises in the US was the main reason for decline in Indian indices today.

He also said that it would be brave on anybody’s part to say that India sees a causal relationship between any particular cause and the way the market has moved.

Earlier, delivering the JRD Tata Memorial Lecture with the theme ‘Regulations - some random thoughts’, Mr Damodaran underscored the need for functional as well as Budgetary autonomy for financial regulators. Besides calling for a transparent process in the appointment of regulators, he also said that regulation was a serious business and that they need to be adequately compensated.

The SEBI Chairman also said that India unfortunately seems to be setting up more and more financial regulatory organisations rather than giving additional task to existing ones.

Mr Damodaran also drew attention on the varying approach to the directions on policy issues that the Centre could make to the financial regulators.