Second, the phenomenon of regulatory capture that Dr Reddy mentioned in his talk was a definite reality. Powerful political and economic influences were at play, and in some cases prevailed. 2  ●  Other factors that have now become well known were the financial industry’s remuneration policies and incentive structure, which ultimately induced excessive risk-taking and short-termism.
The use of derivatives has enhanced the efficiency of spot prices, whose daily volatility has declined compared with the first half of the 1990s and is approaching the levels recorded in more mature markets.