Prashant Saran, whole-time member of the Securities and Exchange Board of India (Sebi), is a man of few words. He doesn’t like small talk, especially with journalists trying to break ice with him.
“Nice speech, sir,” I tell him. “Thanks… see you,” he walks off to catch a friend who was not there. I kick myself for not being quick enough to pick a spot from that long speech for conversation between that “Thanks” and “see you”.
Not exactly my fault, I gave it only as much attention as I could to a speech that starts with a “views are my own, not of my organisation” disclaimer. Add to this, distractions such as the chef making pasta and the ambience itself – of the United Services club lawn kissing the Arabian Sea on a breezy evening. Saran’s own military style speech delivery only made matters worse.
But I knew it was a nice speech when I heard phrases, such as discovery of fire, domestication of animals and ‘fast and feast’ cycle merging seamlessly into other phrases, such as systemic thinking, globalisation and rampant mis-selling. Thanks to my colleague Samie’s iPhone, I could listen to it later in a less interesting, so, less distracting environs of our office.
In an 18-minute-speech written lucidly (forget the delivery for a while), Saran covered the ‘future of financial markets’ in such breadth and depth, the people who coined the phrase would not even have imagined. Calling himself an incorrigible optimist, the regulator said all through earth’s history, life has only gotten better. “All this makes me look at the future very confidently, daily newspapers notwithstanding,” he said.
“Despite all the optimism, do I worry sometime?” he then pondered. Yes, Saran has three broad worries. First, that there is no systemic thinking. Both businesses and authorities think more about attacking the problem at hand but do not often think of the broader impact such solutions might cause. He put forth an anecdote about how a government policy of zero tolerance of forest fire eventually led to a decline in forest cover in the US, instead of increasing it.
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Second, he feels the lack of diversity in business thinking and business systems is a serious issue. Events are read in a remarkably similar way across the globe. Leading minds of business today come out of the same Ivy League institutions; they read the same books and sometimes even magazines. This leads to a serious lack of diversity in trading rooms.
His third major worry is lack of rule of law. According to Saran, there is rampant mis-selling in the financial world, as the consumer protection framework is found wanting. He pointed out the conflict of interest of advisers incentivised by the manufacturer. He is more loyal to the person who pays him, rather than the consumer. “No country has yet found an acceptable solution, as the stakes are high. If we have to start the rule of law in the financial sector, we have to strive to find a solution.” Perfectly justified worries. My only worry, though, is why are these views his personal one’s and not of his organisation?