Fed’s Powell offers support for ‘ambitious’ BoE review
Fair and effective markets review launched in October
The Bank of England (BoE) fair and effective markets review is "ambitious" and an "important initiative", according to Federal Reserve governor Jerome Powell.
Speaking at an event sponsored by The Brookings Institution in Washington, DC, on January 20, Powell said the review raises "the right questions" by considering the "troubling patterns of market abuse" as well as the structural changes in the fixed-income, currency and commodities markets.
Unveiling the review in October, Minouche Shafik, a BoE deputy governor, said there would be a "big effort" to build a global consensus around the issues in the markets, and Powell acknowledged its relevance in the US.
With regards to structural changes, he pointed to broker-dealers "curtailing some of their market-making activities" and losing the "appetite for providing liquidity" while other players including mutual and exchange trade funds are taking "more prominent" roles.
"These changes will affect market liquidity and functioning in ways that are difficult to foresee," Powell said.
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