on another investigation into bond market trading including the associated futures market trading – activity described by one bank chief executive as “wrongdoings” – to me further confirms that the regulators, investigators, and corporate boards have overlooked a fundamental weakness in overseeing market integrity.
In identifying inappropriate trading, the colourful culture of traders is often included as one of the reasons.of traders is often included as one of the reasons lying behind it.
Historically, most centralised exchange markets were established by the participants themselves that traded the goods on offer. They owned, operated and self-regulated their exchanges, and operated under a mutual or co-operative structure. Consequently, the traders, brokers, board members and clearers all had a vested competitive, as well as financial, interest in things happening above board.
In my experience, exchange-traded markets, whether mutual or not, must place high importance on market supervision and trading conduct. They have the expertise and are best placed to ask questions and head off emerging problems. In doing so, they are the front line of protecting their own reputation and that of the marketplace overall, and consequently the public standing of the financial system in which they do their business.