While delivering Keynote Speech at 4th International Conference in Finance, CHILE, Prof. J. D. Agarwal, Chairman & Director, Indian Institute of Finance, stressed the urgent need in developing countries to resort to volatility forecasting in financial markets. Forecasting can facilitate necessary symptoms for possible volatility and help the countries to take necessary steps before the crisis deepens said Prof. Agarwal.

According to him, Volatility in the International Financial Markets is a natural and inherent phenomenon. He feels too much volatility is bad but at the same time no volatility is equally bad. Volatility can be managed & handled well with suitable regulation and supervision and developing appropriate financial systems. Financial systems play an important role in developing financial markets & in turn in promoting industrialization and growth feels Prof. Agarwal. Strong Financial systems with strong financial institutional framework, internationally, regionally and in the home countries, is the key factor for proper financial development & managing volatility in the financial markets.

According to him, all financial developments are subject to high degree of risk of varying nature. Financial Developments with emergence of e-finance has its own risks different from the risks generally associated with financial systems. Prof. Agarwal advocated the urgent need to devise a mechanism to unearth the swindled money, by politicians, corrupt bureaucrats, drug traffickers, industry through capital flight, and militancy outfits, which is deposited in international banks, denying the use of such money in the developmental process of such countries where from it is being swindled.

The world community need to consider the issues involving International Development Cooperation, Restructuring IMF, International Borrowing and Lending, Private Capital Flows, Portfolio Equity Flows, Short-term capital movements, Capital Account Convertibility and Domestic Resource Management, Strengthening banking and financial systems, more seriously to match them with the needs and requirements of home countries, regions and the world economy said Prof. Agarwal.

Prof. Agarwal also emphasised the need to improve the institutional framework in which financial markets operate world wide, adoption of codes of conduct of fiscal, monetary and financial policies, introducing transparency, forecasting volatility in the financial markets, introducing sound principles of corporate governance as well as governance, improving information related to financial markets, Strengthening prudential regulation, and adopting minimum international standards in these areas. He strongly feels that there should be adequate representation of developing countries in evolving the international standards and codes of conduct.