Fortress Europe is not the answer
Financial Secretary to the UK Treasury, Marc Hoban, lay down the gauntlet to the European Commission to get the MiFID Review right, otherwise it could set the industry back a decade.If we get the MiFID Review right it could contribute even more growth to the EU's GDP, but if we get it wrong it could set us back a decade. Speaking at the afme European Market Liquidity Conference today, Mark Hoban, secretary to the UK's HM Treasury, appeared eager to appease the City's concerns that the UK planned on being as zealous as regulators in the US or in the EU when it comes to imposing overarching regulation that would threaten the UK's status as a global financial centre.
"It is important to be seen to be doing things right, rather than doing a lot," he stated as he read from his carefully prepared script. He seemed to particularly have it in for the European Commission's MiFID Review of MiFID 2 as some call it. Hoban said MiFID 1 contributed 0.8% of EU GDP but he sounded a bit circumspect about its successor saying that some aspects of it were opaque. "Does an individual owning two computers amount to organised trading? I hope that is not the case."
Hoban questioned whether the EC really understood the different dynamics of the markets. He said regulators needed "to understand the difference between global wholesale markets and domestic retail markets" and that each market, whether it is equities, fixed income or FX, had their own dynamics.
He appeared against a "one-size-fits-all" approach to regulation saying that high frequency trading was not all bad (it adds to liquidity) and that "dark pools" suffered from somewhat of an image problem but that they were not as sinister as their name suggested.
And when asked by a member of the audience as to whether MiFID was appropriate for FX, he said that we shouldn't assume what is appropriate for one market is appropriate for another.
Date Posted:3rd February 2011