11 January 2023

ICMA Quarterly Report - Richards: Assessment of Market Practice & Regulatory Policy

Hoping for stability ahead; Monetary policy, financial stability and capital market resilience; Global trends and the implications for global asset management; Primary markets; Secondary markets; Repo and collateral markets; Sustainable finance; FinTech and digitalisation

"Looking forward into the year, we expect the intense
regulatory activity to continue. With many of the key EU
files coming to finalisation and then implementation, and
with the UK having announced an ambitious programme of
regulatory reform, it will be critical for the ICMA community
to work together to reinforce messages of the importance of
cohesion and harmonisation in protecting market structure,
avoiding fragmentation and maintaining or improving liquidity
provision where possible. Market resilience is certainly a key
topic as we assess the potential risks ahead, and liquidity
concerns have grown with several highly disruptive and
unpredictable events in the course of the year. Recent reports
and publications from the FSB and IOSCO have highlighted
fragilities in bond market structure, and concerns around
access to and provision of liquidity and the role played in the
market by NBFIs. The objectives of all market players are
certainly aligned to eradicate or smooth out the increasingly
frequent so-called “Black Swan” events and we need to
ensure that regulatory initiatives to solve for one set of
issues do not create a “pop” elsewhere. To that end we
will be bringing members from multiple ICMA committees
together on a regular basis to consider key issues impacting
market liquidity and resilience across all areas of the cash
bond and repo markets to try to pre-empt risks and feed into
the regulatory dialogue...."

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