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I was reading up on participatory notes. Wikipedia defines these as "instruments issued by registered foreign institutional investors (FII) to overseas investors, who wish to invest in the Indian stock markets without registering themselves with the market regulator, the Securities and Exchange Board of India - SEBI."

The same article and few other references described the kind of volatility P-Notes can induce into the stock market. All that I managed to understand from this is that the SEBI, in trying to lay ground rules for trading in P-Notes actually managed to rake up the bear sentiment (Expectations at work here, yes?) and actually brought upon the crisis, no matter how short-lived.

I want to know what in fact could have possibly happened had the crisis lasted longer. Could this have had lasting bearing on the working of the economy?

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