16 July 2018
Patrick Chambeau

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Patrick Chambeau - IPC

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Trends in Financial Services

Trends in Financial Services

A community to discuss the future of financial services and any other interesting trends, strategies, ideas, views.

How is the Italian crisis impacting the trading floor?

01 June 2018  |  5648 views  |  0

Earlier this week, I was in Paris speaking to Traders, Heads of Desks and other people on the floor from various part of the financial ecosystem in France and Europe overall: institutional investors, asset managers, brokers, and investments banks to name a few. There were numerous discussions about technology, innovation and digital transformation goals, however one of biggest topics of conversation was the immediate challenge they were dealing with: the Italian crisis. 

What is Italy’s political crisis?  And why does it matter?

Italy has plunged into crisis mode after several weeks of protracted negotiations between anti-establishment groups ultimately failing to produce a new coalition government.

  1. Italy’s economy, the euro zone's third-largest, has been anemic for a long time. That's been a significant concern for the EU as well as global markets more broadly.
  2. For the first time since World War II, Italian populists are on the brink of securing an unprecedented popular mandate to govern the country.

Why this situation create stress, but maybe opportunity as well? 

Volatility fuels the financial markets through uncertainty. It stems from cycles, speed, "infobesity" and the systemic global world in which we are now living. This was the case with, for example, the Swiss franc being uncapped from the Euro a couple of years ago, Brexit, and the US elections - these incidences saw a lot of flash crashes in different asset classes and general political uncertainty.

With this level of unexpected events, and for traders in volatile and stressed market conditions, you need to have access to a diverse ecosystem and community. Having access via a dedicated network and trading communications systems to a very diverse group of market participants – including buy side, sell side, trade life cycle providers, inter-dealer brokers, market data providers and exchanges – is important for different types of firms that have different trading needs. This is even more critical and vital during very volatile market conditions. Traders can find their counterparty more easily to execute their trades, especially during difficult times when, for instance, everyone is rushing or panicking…there might be someone who is willing to take the other side of the trade.

Providing access to a diverse financial ecosystem and community

To no one’s surprise, there is an increasing demand for liquidity in financial markets and most firms appear to want to maintain constant market access.

Traders expect to be supported by reliable trading technology partners around the world and cannot afford to have connectivity issues hinder generating alpha, sourcing liquidity or mitigating risk.  They need help to trade faster, scale rapidly, and achieve greater agility, productivity and efficiency, resulting in a competitive advantage. Ultimately, by having access to a large and diverse financial ecosystem, financial firms have a much better chance of weathering any storms – including extreme political uncertainty.

 

 

 

TagsTrade executionPost-trade & ops

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