Manfred Wiebogen President ACI, The Financial Markets Association
Manfred Wiebogen President ACI, The Financial Markets Association

Financial Markets: Are we heading back to normality?

Some economies are showing signs of recovery. Will it be sustainable? Will the financial markets industry find a way back to 'normality'? What will be the consequences for the FX markets? The financial crisis has highlighted just how little is known about the structure of banks' international balance sheets and other issues of interconnectedness. Nowadays we are all waiting for what the regulatory environment comes up with next....

Whilst George Soros recently explained “The way out of a deflationary trap is to first induce inflation and then to reduce it” he tried to anticipate the likelihood of a raising yield curve on the back of a recovering economy but also of a massive demand in funding requirements by some governments for their spending programs.The financial environment we are in faces interesting developments including: Shrinking FX turnovers Rapid evolution of prime brokerage Increased FX volatility Shortage in US dollar in global banking Slightly increase of the US dollar in currency reserves Concerns in clearing and settlement Increased international criticism of the greenback Developments in algorithmic trading Negative interest rates by CB New talks about Tobin tax ECOFIN meeting ahead Raised voices to limit bonus payments (by governmental recommendations so far) These are all serious issues and besides the actual market developments a lot of politics is involved too – even in our business...continued

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