Highlights From FIA EXPO 2014:
Keynote Speaker: Sharon Bowen, CFTC Commisioner
- All current commissioners are post Crisis
- Rules are not yet finalized, to everyone’s frustration
- “Risk isn’t bad”
- The CFTC has a goal that *all* SWAPs, futures, etc, be exchange traded an exchange cleared. No more OTC
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Panel Discussion – “Excuse the Disruption”
Moderator:
Walt Lukken, President & Chief Executive Officer, FIA
Speakers:
Kim Taylor, President, Global Operations, Technology & Risk, CME Group
- Dec 15 is the deadline for US/EU congruence on clearing members. No one knows what may happen if deadline is not reached.
- Capital requirements are on the way up
- Regulation pendulum may be swinging from too little (2006-7) to too much
- Compliance costs for firms are soaring
- The number of futures clearing members (FCMs) is falling. 10 years ago there were 100+. Now 64 and shrinking
- Cyber attacks are increasing. Not a day goes by when an exchange or institution isn’t attacked.
- Increasing volatility is good for the derivatives industry (well, duh)
- Women woefully under represented in the industry
- Consensus is that oil prices will fall farther. There isn’t a shortage of oil, there a shortage of places to store the stuff. Strategic Petroleum Reserve required to have 90 days supply on hand. Currently 295 and increasing
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Lunch speaker: James Surowiecki (WSJ, The New Yorker)
- “The Wisdom of Crowds”
- There is wisdom in collective opinion. If!
- The collective is intellectually and culturally diverse.There is anonymity of opinion (never go around the room asking for an opinion. The last few people asked will invariably conform to the majority)
- Any market is best when diverse, ie there is a mix of speculators, investors and hedgers