Moreover, the debate on financial innovation and regulation has to be considered in terms of potential and systematic relevance of such innovations besides the capabilities for bringing them effectively under the regulatory umbrella (Mohan, 2007).
Therefore, there is a need for reform of the regulatory framework to shield the financial system from potential crises, while identifying measures to mitigate the consequences of any future episodes of financial stress. The regulatory framework will need to keep pace with the associated risks in a more rapid and effective manner.