“Economists have for decades recognized that transparency benefits the marketplace. After the last great financial crisis facing the nation, President Roosevelt called for transparency in the futures and securities marketplaces. It is now time to promote similar transparency in the OTC derivatives marketplace.” – Gary Gensler, CFTC Chairman
This is an excerpt from CFTC Chairman Gary Gensler’s December 2, 2009 testimony before the House Committee on energy and commerce (Subcommittee on energy and the environment), and I can see one word in particular that really jumps out: transparency. I’ve been thinking about transparency quite a bit as we kick off the new year, and I think Gensler’s quote is a definitive call to action as well as a conversation-starter.
Without a doubt, this will be a major theme throughout 2010 – you will undoubtedly see it popping up frequently in SunGard’s ongoing discussion of trends with the #ten10 hashtag on Twitter. In the derivatives markets in particular, promoting and increasing transparency will be an important task to tackle. This is a task that touches regulation, risk and reporting, and I believe we will continue to see and should see a strong push for increased transparency across the board this year.
One thing I’ll add is that when it comes to reporting and risk in particular, increased focus on transparency will also mean increased focus on a real-time view of your data and achieving more efficient methods of communication. This theme is driving a lot of what my team is working on, and you will see more blog posts around these topics as the year goes on.
In conversations I’ve had with colleagues and industry experts, I can see how deeply transparency will resonate this year and I am eager to see how this will all unfold. What types of conversations have you been having around this topic?
What do you think 2010 holds for the idea of transparency in the derivatives markets?