Financial Markets: Serving the Real Economy? Conference 10 Oct 2012

An “Investing not Betting” event

Stanhope Hotel Rue du Commerce, 9 1000 Bruxelles

The Markets in Financial Instruments Directive (MiFID) adopted in 2004 revolutionised the trading landscape in Europe, paving the way for alternative trading venues and algorithmic trading to become dominant features. Seven years later, the Commission proposed a ‘MiFID review’ to extend the scope and depth of the legislation to the full range of capital markets, a timely move as European economies struggle to find new sources of funding.

This review contained ambitious proposals to strengthen the powers of regulators and investor protection, reinforce regulatory and market transparency and address challenges such as high frequency trading and the ‘financialisation’ of commodity derivative markets. Finance Watch published its views on the legislation in its April 2012 position paper “Investing not betting“. Soon after the European Parliament’s ECON Committee voted to approve its version of the legislation on 26 September 2012, Finance Watch assembled a diverse group of senior regulators, reformers and industry representatives at a conference in Brussels to debate some of the more controversial proposals in the legislation.

The executive summary of the conference is available here. Other materials from the day are below.

Keynote speeches

• Thierry Philipponnat, Secretary General, Finance Watch (download pdf or watch full speech video)
• Nadia Calviño, Deputy Director General for Financial Services, Directorate General Internal Market and Services, European Commission (download pdf or watch full speech video)
• Markus Ferber, Member of the European Parliament and MiFID 2 Rapporteur (watch full speech video)

Panel 1 “Commodity Derivatives speculation: too much of a good thing?”

What explains the recent 30-fold increase in capital inflows to commodity derivatives? What are the consequences for price formation and volatility? How are pension funds and banks treating these markets? What has worked to stabilize prices in the past? Where do we stand with position limits? How can capital best support commodities production and consumption?

Panellists:

• Maria-Teresa Fabregas – Head of Unit, Securities Markets, European Commission (watch full speech video)
• Judith Hardt – Secretary General, FESE (download pdf or watch full speech video)
• Mike Masters – Founder, Masters Capital Management; Founder, Better Markets (watch full speech video)
• David Bicchetti – Economist, Div. on Globalization and Development Strategies, UNCTAD (download pdf or watch full speech video)
• Frédéric Baule – Expert in Products and Derivatives Trading, Risk management Services, Petroleum industry (watch full speech video)
• Moderator – Pauline Skypala, Deputy Markets Editor, Financial Times

Keynote Speech

• Thierry Francq, Secretary General, AMF (watch full speech video)

Panel 2 “Market Structure and Technology: who benefits?”

What are the lessons from MiFID1 and Reg NMS? Has fragmentation and the technological ‘arms race’ benefited end-users or intermediaries? What tools do regulators need to tackle predatory HFT strategies and keep markets stable? Will MiFID2 improve investor and issuer confidence in markets? What obligations and incentives should market makers have?

Panellists:

• Mark Hemsley – CEO, BATS Chi-X Europe (watch full speech video)
• Joe Saluzzi – Co-founder and Co-head of equity trading, Themis Trading LLC (download pdf or watch full speech video)
• Ryan Chidley – Senior Equity Trader, APG Asset Management (watch full speech video)
• Tim Rowe – Manager of Trading Platforms and Settlement Policy, FSA (watch full speech video)
• Remco Lenterman – Chairman, FIA-EPTA (download pdf or watch full speech video)
• Moderator – Benoît Lallemand, Senior Research Analyst, Finance Watch

Keynote Speech:

• Laurent Degabriel – Head of Division, Investment and Reporting, ESMA (download pdf or watch full speech video)

Presentations from the conference are provided with permission from the speakers, who retain copyright to the content. Copyright to the photos and videos belongs to Finance Watch. Photos may be downloaded from Flickr provided the photographer, Charles Kinoo, is credited in any subsequent publication. To request high resolution photos, please contact us.