Whether it was introducing Commodity Futures Trading Commission Chairman Gary Gensler’s keynote address or sharing his witty take on NASCAR advertising with reporters, IntercontinentalExchange founder, Chairman and CEO Jeff Sprecher was the man about Boca at last week’s International Futures Industry Conference. There is no doubt that Sprecher is at ease in the spotlight that comes with ICE’s play for NYSE Euronext. Below are a few of the opinions Sprecher shared throughout the week.
On the very timely issue of exchange mergers and acquisitions: “We’ve had to move things around like chess pieces in order to keep up with our client needs. We think that’s driven a lot of growth for us. M&A has not so much been about trying to get big for scale sake. It’s about trying to have enough pieces to solve customer problems.”
On the greatness of U.S. capital markets: “The public markets are a great place to raise capital. (read more…)
Last week’s International Futures Industry Conference in Boca Raton, Fla., featured luminaries from all aspects of the futures industry. The speeches and panel discussions included witty and insightful comments from regulators and industry executives. Here’s a handful of highlights.
Commodity Futures Trading Commission Chairman Gary Gensler on the London Interbank Offered Rate investigation: “[Libor] has been readily and pervasively rigged. At each bank, the misconduct spanned many years, several cities, numerous employees including senior management, multiple benchmarks and currencies, and there was clear evidence of collusion. … We should not think of any benchmark as too big to replace.”
Hong Kong Exchanges and Clearing CEO Charles Li on regulatory reform: “From an Asian perspective, we are the innocent bystanders of a major traffic crash. … We are talking about medicines that are going to cure all these problems, and we are not part of the cause. Now we end up having to eat some of the medicines that are being prescribed. (read more…)
Since virtually the day the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted, some policymakers and market participants have been working to see elements of the law changed or the entire legislation repealed. Those constituencies have been forced to adjust their tactics in recent months because of unique political winds swirling around the issue of major financial institutions being seen as “too big to fail.”
Lawmakers on both sides of the aisle have voiced their concerns that Dodd-Frank does not do enough to remedy what they see as the threat posed by some of the nation’s largest financial institutions. Panelists during the “Washington Outlook” session at the 38th Annual International Futures Industry Conference explained that the bipartisan movement to break up the big banks is making it tricky for the industry to advocate any legislative changes to Dodd-Frank.
“You have this bizarre left-right alliance that is coalescing around “too big to fail,’ ” explained Jimmy Ryan from Elmendorf | Ryan. (read more…)
Singapore Exchange and Korea Exchange have decided to collaborate in an effort to develop over-the-counter financial derivatives clearing capabilities. SGX, which has been clearing OTC financial derivatives since late 2010, has cleared close to $300 billion notional of OTC financial derivatives including interest rate swaps and non-deliverable Asian foreign exchange forwards. Meanwhile, KRX plans to begin clearing OTC derivatives in the middle of 2013 as part of an effort to attract a more global client base.
Speaking on the sidelines of the 38th Annual International Futures Industry Conference, SGX Chief Executive Officer Magnus Bocker shared his view on the importance of clearing. “If you look into 2013 and even 2014, one of the big changes to our industry is clearing. Where the clearing will take place. … Who has the resources to put money to work in that area.”
“This collaboration will explore possible synergies to better meet the needs of market participants, particularly in the Singapore and Korea markets. (read more…)
Traders may find it slightly disconcerting to learn what is going on inside their bodies when volatility rises and falls, says John Coates, senior research fellow in neuroscience and finance at the University of Cambridge and author of “The Hour Between Dog and Wolf: Risk Taking, Gut Feelings, and the Biology of Boom and Bust.” Coates, a former derivatives trader at Goldman Sachs and Deutsche Bank, says, “It is entirely possible that trading is an addictive behavior.”
The role biology plays in risk taking was a key topic during Coates’ keynote address, “New Research in Neuroscience & Finance; The Biology of Risk Taking,” at the Chicago Board Options Exchange Risk Management Conference in Carlsbad, Calif.
Why it important to study the neuroscience of risk
“Every blowup we’ve seen north of $1 billion that shakes a bank to its foundation is handed to us by traders at the end of a two- or three-year winning streak. (read more…)