Backward-Looking Debate

In his speech, Commissioner J. Christopher Giancarlo said,

This evening, I would like to spend some time pushing aside that clunky rear-view mirror and taking a clear view at the challenges for capital and risk-hedging markets in the first quarter of the 21st century.

I believe there are six developments that are transforming global financial markets today. They are:

1. Cyber Threats;

2. Disruptive Technology;

3. Government Intervention;

4. Market Illiquidity;

5. Market Concentration; and

6. De-Globalization.

And his conclusion,

Modern financial markets are like complex, global ecosystems in the natural world. Today, those ecosystems face six major challenges:

1. Relentless assault by hostile cyber predators;

2. Rapid habitat transformation by new digital technologies;

3. Single species overexpansion and dominance by “Washington Whale” central banks;

4. Nutrient and habitat diminishment through deterioration of trading liquidity;

5. Reduction in biodiversity of key market service providers; and

6. Habitat fragmentation of global trading environments;

Regulators and others with responsibility for financial markets must do the following to address these challenges: prioritize cyber risk resiliency, foster best practices for new trading technologies, counter the distortions caused by central bank market intervention, acknowledge and address the diminishing liquidity in trading markets and review and reduce the numerous poorly designed rules and regulations that are causing service-provider concentration and market fragmentation.

Do read it all (long) I’m just putting it here for my own reference.


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