For example, some foreign organizations have suggested allowing trading of domestically issued Indian securities abroad, only reporting the trades domestically. Unfortunately, this could subtract trading on Indian exchanges, and thereby diminish liquidity. We have suggested to such organizations that they either conduct their trades on the Indian exchanges, or that they direct their clients to Masala bonds. The former is still under discussion.
Innovation Financial innovation is sometimes seen in a bleak light as a way to evade or avoid taxes and regulations. Properly done, however, financial innovation can slice and dice risks so that they are placed on the right shoulders.