June 2, 2015
Welcome to the second meeting of the Market Risk Advisory Committee, of which I serve as Sponsor. I would like to first thank the Chairman and my fellow commissioners for being here today; it has been great working with you on these issues. I would also like to extend a thank you to our MRAC members for bringing your passion and expertise to these important issues. Thank you as well to the staff of the Division of Clearing and Risk, Division of Market Oversight, Division of Swap Dealer and Intermediary Oversight, and Office of the Chief Economist for providing the technical support for these meetings. And thank you to the logistical staff, who worked behind the scenes to put this meeting together.
The purpose of MRAC is to provide the Commission with market intelligence and recommendations from industry about market risk and market structure issues. Our first panel tackles an important market risk issue – cybersecurity. The importance of having effective cybersecurity measures cannot be overstated. Cyberattacks on US businesses have become alarmingly commonplace and it’s critical that the financial industry have strong protections in place. Recently, our staff held a roundtable on cybersecurity testing. After attending that discussion, I became very interested in the Bank of England’s use of the CBEST program to deliver targeted, intelligence-led cyber security tests, to significant market players. I wanted an opportunity, and I thought the Commission would benefit from the opportunity, to understand CBEST better, and hear our market participants’ thoughts on the program. Thank you to David Evans, and the Bank of England, for graciously providing us with that opportunity today.
Our second panel addresses an important market structure issue – liquidity. Several market participants have noted that there are significant liquidity movements in the markets we oversee. It is important, in order to regulate effectively, that the Commission get information from market participants about what is happening in our markets. MRAC offers a wonderful opportunity to do so, as our membership is so diverse, including end-users, dealers, buy-side, swap execution facilities, exchanges, clearinghouses, and academics. And with our guest panelists today, we also have the benefit of hearing from trading desks. In sum, the purpose of the second panel is to: (1) understand what market participants are referring to exactly when they say “liquidity” – as it can have a number of meanings; (2) learn if there actually have been liquidity movements, and if so, in which markets; (3) determine the causes of changes in liquidity; and (4) discuss what actions, if any, the Commission should take.
I am greatly looking forward to both of these panels, and I will now turn it over to Ms. Walker who will introduce our first moderator and panel.
Last Updated: June 2, 2015