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Submitted by Nachiket Mor on
This appears to be a very valuable report and I look forward to reading it when it comes out in print. There is much to be learnt, I am sure, for those of us that are involved in financial development challenges in other parts of the world. From the summary presented here I wonder though if the report has adequately examined the micro-foundations of a sound financial system. In our work in India ( we have tried to emphasise the development of models that move away from a product focussed view of the financial system (credit, savings, insurance, pension) to a much more customer focussed view (wealth management, ex-post provider liablity). We also feel that in a world in which cash, cheque, credit cards, ATMs may eventually vanish with increasing use of biometrics and digital money, traditional approaches towards thinking about the manner in which financial products are offerred to customers may need to be abandoned in favour of completely new ones. Even simplicity, transparency, and financial literacy as a methodological principles may need to be give up and new ones which emphasise more "goodness of fit" may need to be adopted. It is our belief that in addition to thinking about all the issues mentioned in the report summary it would be important to recognise that poor quality of financial systems design at the point of contact with the individual or the corporate customer is also a source of systemic risk in financial systems.