P/F/333. Regulation of financial markets

The paper reviews the current situation in the world financial markets commenting on the forms of market efficiency and the implications of financial liberalisation. The objectives of financial market regulation are outlined; its importance is discussed in the context of the Asian financial crisis of late 1990s. The use of special measures of control is reviewed; specific needs for the regulation of risks in the derivatives markets are highlighted. The advantages and disadvantages of the existing regulations of the financial system are analysed.