Unique Opportunity to Shape Fairer and More Effective Markets

In this guest blog, Barbara Ridpath of the St Paul’s Institute calls for non-finance sector voices to be engaged with the Bank of England review of financial markets.

There are myriad people and organisations trying to rethink capitalism, finance and the financial markets since the financial crisis of 2008-09. There are some difficult lines being drawn about who is inside the tent challenging the status quo and who consciously chooses to stay outside. What is evident is that making progress and changing hearts and minds is difficult without dialogue, and dialogue is difficult if you don’t understand all sides of the arguments.

For this reason St Paul’s Institute has actively engaged in the Fair and Effective Markets Review (FEMR) initiated by HMTreasury, the Financial Conduct Authority and the Bank of England to address structural problems and issues of misconduct in the wholesale Fixed Income, Currency and Commodities (FICC) markets and identify ways of making financial markets more effective. While, at first sight, this topic seems highly technical, these markets have enormous significance in determining commercial behaviour throughout the world at all levels of the global economy.

Inefficiencies in these markets affect the production chain from individual farmers to consumer prices. Lack of trust in these markets increases costs through regulation, compliance, contracts and litigation. The recommendations that have already been made by the FEMR are intended to ensure better long-term market integrity, establish more effective enforcement to deter misconduct, and promote more transparent and equal-access FICC markets.

One of the outcomes of the FEMR review is the creation of the Open Forum by the Bank of England. This is an effort by the Bank to open up comment and views on the financial markets to a broader constituency. The first meeting of the Open Forum is 11 November at Guildhall. Registration for the Open Forum is now open until 23 October. Acceptances will be made from the registrations received. The Bank is actively trying to increase participation from the non-financial sector. We commend them for that.

It is vital that third sector organisations contribute to the forthcoming Open Forum if progress on adapting our economic and financial markets to serve the needs of all people and communities in a fair manner is the objective. Without significant mobilisation, it is very likely that the majority of Open Forum participants will represent the interests of financial sector representatives.

You can learn more about the Fair and Effective Markets Review either with our briefing sheet or by reading the Final Report.

Have a voice!