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Follow Futures Be careful of what you (regulators) wish for 

March 12, 2014
CommodityFACT.org Blog, Futures

Big, sweeping changes to any established market run the risk of unintended consequences, particularly when those changes result from multiple pieces of legislation and regulation, often written independently of each other and introduced more or less at the same time.

The UK’s Financial Conduct Authority (FCA) now thinks it might have spotted some in the commodity markets, warning in a report published at the end of last month about the impact a retreat by investment banks may have on market liquidity and transparency.

None of this will come as any surprise to commodity derivatives users. Several banks have scaled back or pulled out entirely from physical commodity markets over the past year or so – a move that some have attributed to new regulations – and industry participants have been warning about the affect this may have on market dynamics for some time.

Read more: Futures

 
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