Agreed.

Systemic risk refers to the risk of a breakdown of an entire system rather than simply the failure of individual parts. In a financial context, if denotes the risk of a cascading failure in the financial sector, caused by linkages within the financial system, resulting in a severe economic downturn.

Regulations of the financial sector decrease systemic risk. One of the main reasons of the US Subprime Mortgage Crisis was the deregulation of the banks and financial institutions by removing all financial regulations left from the Great Depression. In 1999 the Gramm-Leach-Bliley Act also known as The Financial Services Deregulation Act legalized many financial activities .This allowed financial institutions to take excessive risk and make bets with the depositors money leading them to bankruptcy an causing the Global Financial Crisis. see my book with the same title Routledge 2016

The financial sector is very critical to any country's economy; therefore, it should be regulated PROPERLY so that no harm to be caused to respective parties.

Totally Disagree

Risks are part of any economic activity and mitigation requires high levels of legislation and at the same time supervising financial services because the business of banking is linked to uncertain future events and the risk of a bank failure is always a possibility in a system essentially run on confidence and economic growth.

The importance of regulation and supervision have came to address and solve problems of systemic risk when the economy is in recession or expansion with respect to address problems such as market imperfections in the financial sector with elements such as adverse selection, information asymmetries and moral hazard and on how to mitigate such problems as they fall due, so regulation on its own cannot increase systemic risk only when done with political pressure and in bad faith on the part of regulators.

Proper and effective regulation by the Regulator may help in reducing the systematic risk to a certain extent, moreover, it will increase the level of confidence of the investors, which will definitely be contributing to the development of the capital market of a developing country like INDIA.

Regulations for the financial sector do not increase systemic risk, provided that they are legal acts adequate to the needs of a given market at a specific time. Why? I believe that the financial market regulator (e.g. in Poland it is the Polish Financial Supervision Authority) has a huge responsibility in terms of neutralizing threats related to financial crime, preventing excessive speculation and the use of untested financial instruments by market participants, the use of which may lead to the formation of speculative bubbles and huge losses of investors in the capital and currency markets.In the past, we were able to observe the chaotic deregulation of the market, as was the case in the USA in the 1980s and 1990s, which indirectly contributed to the three mega-crises in 1987, 2001 and 2008 .In my country (Poland), there are no appropriate regulations and omissions on the part of supervision in the matter of responding to negative signals and information from the young stock market in the first half of the 1990s led to a gigantic collapse of the Warsaw Stock Exchange in 1994. The collapse of that time undermined the confidence in the stock exchange of small individual investors for the next 10 years. These minor injured investors returned only after the Polish legislation was brought into line with the European Union and after the introduction of a modern market surveillance system prior to EU accession in 2004 and the modernization of the stock exchange listing system on the Warsaw Stock Exchange. Today in Poland we have just celebrated the 30th anniversary of the functioning of the modern capital market in democratic Poland and we have not had big financial scandals or spectacular crashes for many years. Best Regards