1. Panel on users and producers
Anthony BELCHAMBERS, CEO of the Futures and Options Association, said that speculation has been a polemic topic during the whole debate. However, he believes that speculators are key players of the market because in many transactions they take the other side of the risk and they also provide liquidity. He stressed that commodities markets are very different one from each other and regulation should be properly tailored and avoid the one-size-fits-all approach. Finally, he pointed out that enhancing risk management is essential in the post-crisis era. If it is not properly enhanced, we could end up with safer markets where it is too expensive to operate and the risk will moved to other parts of the financial system.
Paul DAWSON, RWE Head of regulatory affairs, emphasised that energy companies do not pose systemic risk. He used the case of Enron and explained that ENRON did indeed collapse but the whole Energy market kept working without any type of problem which demonstrates that energy companies are not systemic. He also stressed that energy companies are heavily supervised by national regulators. Mr Dawson fully supports more transparency in the market and believes it is a challenge to increase confidence in the market.
2. Panel on the road ahead for EU energy and emissions markets
Frederik VOSS, Vice President Carbon & Business Development from Nasdaq OMX Commodities, believes that there is not a great need for tailored made regimes, as all the mechanisms behind the trading of any type of energy commodities do not differ widely one from each other. However, all authorities should equip themselves with the knowledge of the specificities of each of the commodities market in order to be able to supervise better. He openly criticized that the European power and gas markets are overall very poor in terms of transparency and liquidity. The Nordic power market is working fine with reasonable amount of transparency and liquidity as well as German power market, but apart from these two cases, the rest of the EU market is highly opaque. He also stressed that energy commodities markets do not pose systemic risk.
Alexandre MARTY, Head of Policy Carbon and Environmental Markets of EDF Trading, presented the following key characteristics of the carbon market:
· Carbon market influences the rest of the energy commodities.
· More than 80% of the transactions on carbon commodities took place in regulated exchanges.
· Price disclosure tends to be very efficient.
· There is a high level of central clearing.
· Market participants are very small and they are forced to participate because of the regulatory obligation.
· It is a fast evolving market. There is still room to evolve due to the ETS regulation phase III which will reduce the market.
He pointed out that there is a regulatory gap in the carbon market. There is still an issue to be solved on trade repositories. It is very easy to access the physical side of the market, to open an account is quick and that is a weakness because sometimes it is not possible to know who is operating from where.
Finally he said that regulators should leave enough room to the carbon market to evolve and DG climate action is about to undertake some studies on the abusive practices in the market and the responsibilities of market oversight.
© European Commission
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