Key Points
It is especially worrying in India, where trading in futures and options is now more than 400 times bigger than the underlying cash-market turnover..
This is a slow transfer of wealth from the real economy to a financial elite, the full impact of which may only be felt when its too late to stop it...
The erosion of public confidence in a market that had only recently started accepting foreign institutional money led to a slew of changes: electronic trading, guaranteed settlements, replacement of paper-based share certificates with account entries to stop counterfeiting, and starting in 2000 exchange-traded derivatives...
Last months total turnover of $78 trillion from futures and options on indexes and stocks trumped the $178 billion from shares changing hands on Indias National Stock Exchange by a multiple of 441..
While too much concentration of wealth and power in the hands of a narrow financial elite is not a great outcome anywhere, premature peak finance can be especially damaging to a developing country that still needs to churn out a lot more real output to get rich.. (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice on ETMarkets..
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