Instead, the entire institution – right from the Board to the frontline managers – have to be responsive to this objective. 2  BIS central bankers’ speeches  Need for a credible and effective regulatory regime 9. The presence of a credible and effective regulatory regime acts as a source of confidence and comfort in the financial system.
This helps in attracting more participants to the market place, thereby making the financial system inclusive and efficient. The experience from the global financial crisis is that self-regulation, often, does not work. The presence of a strong, intrusive and hands-on regulator/ supervisor gives the confidence that markets will operate as per sound principles and would be free from unfair and unethical practices.