A STUDY ABOUT THE FINANCIAL MARKETS AND INVESTMENTS IN THE STATE OF TAMIL NADU

Abstract

The paper examines how developing financial markets in emerging economies may affect financial stability. On the one hand, the growth of the financial industry has increased resiliency and promoted domestic financial stability by introducing new methods for raising money and managing risks. On the other hand, higher levels of private sector debt in foreign currencies, substantial foreign involvement in local currency government bond markets, and the expanding significance of non-bank financial institutions have all exacerbated external vulnerabilities.

These trade-offs provide a number of policy difficulties, including the creation of hedging markets, enhanced FX flow monitoring, and the use of macroprudential instruments and FX intervention. Some consequences of fintech for financial stability are discussed in the paper's conclusion.