The financial markets over the next decade will change even more dramatically, become more uncompetitive and will be subject to more systemic risk, says industry legend John Gubert, Senior Advisor, Global Securities Services at Unicredit.
Network managers will need to be prepared for another crisis, said Gubert at the 11th annual NEMA conference in Dubrovnik, Croatia. Between 1987 and 1999, there was very little change in the markets and during my time in securities services. However, in 2010, the pace of change accelerated with changes in the emerging markets, central clearing depositories (CSDs), the regulation explosion with MiFID, changes in technology, the crash of Bear Stearns, derivatives being used as a portfolio tool.
However, I believe over the next 10 years, the changes and risks, primarily driven by regulation and infrastructure, will be greater than what was experienced over the last quarter of a century, added Gubert.
Gubert detailed a wide range of nightmares that impact the financial markets and systems in a detrimental way. However, he revealed that these are in fact a reality and is leading to another major financial crisis.
I have spent some time highlighting how regulatory changes could be highly uncompetitive, said Gubert. Things have got tougher nd the market is suffering, following the economic thuggery from regulators and impossible levels of mandatory change.
Other major concerns highlighted, included central counterparty clearing (CCP) with Gubert saying that no one is properly assessing the risk profile of these entities despite the $583 trillion worth of derivatives going through these houses.
I also believe there is a low probability of a bull market and the best times are over, said Gubert. A lot of the pain from the past is already being forgotten, with everyone looking to the new world for more opportunities, rather than the true world. We are moving towards a more super governmental authority society, more impossible regulation and a landscape with increased risk and complexity.
Please click here for all coverage of the NEMA conference in Dubrovnik, Croatia this week with Global Custodian.
(LB)