Politicians are gunning for the over-the-counter markets, and some exchange-traded derivatives specialists are happy to let them take the flak, swanking that the world has finally recognised the exchanges’ virtues. But Alex McDonald, chief executive of the Wholesale Market Brokers’ Association, argues that the OTC markets, with their devolved regulation and confederated structure, actually hold the secret to a healthy lifestyle for the financial markets as a whole.
If forecasting the financial markets is now more of a random walk than ever, the outlook for the financial services industry is assured: more regulation and more regulators.
The meek industry acceptance of such an outcome is surprising, considering that it has been the onshore banking and insurance systems – the most regulated parts of the industry – which have failed, rather than the more usual suspects.
Many theories as to the future shape of the regulatory and supervisory landscape...