Financial Regulation and Economic Progress: A Legal Perspective

Abstract

This research explores the critical nexus between financial regulation and economic progress from a legal standpoint. Financial regulation refers to the legal and institutional frameworks that govern financial institutions, markets, and instruments to ensure transparency, accountability, and systemic stability. As economies grow increasingly complex and interconnected, the role of financial law in safeguarding public interest and enabling economic development becomes more vital. This study employs a doctrinal methodology using secondary sources such as statutes, judicial interpretations, policy documents, and comparative legal analysis to assess the effectiveness of India’s financial regulatory architecture. By examining key reforms such as the Insolvency and Bankruptcy Code (2016) and the regulatory mechanisms established by the Securities and Exchange Board of India (SEBI), the research demonstrates how sound financial regulation fosters investor confidence, credit access, and market stability, and capital formation— key drivers of economic growth. Furthermore, the study investigates challenges like institutional overlap, regulatory delays, and emerging issues such as fin- tech governance and ESG compliance. Through legal analysis and global comparisons, the paper concludes that a dynamic and enforceable financial legal framework is essential for fostering inclusive and sustainable economic development. The research also presents key recommendations for policy reform, legal modernization, and enhanced coordination among regulatory bodies to strengthen the financial ecosystem.