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Financial regulation plays catch up with crisis without tackling the real causes
Date 21/10/2011 15:35  Author webmaster  Hits 890  Language Global

• 21 OCT 2011

EurActiv (Financial regulation plays catch up with crisis)

The European Commission has proposed extending the Markets in Financial Instruments Directive (MiFID) to redress market abuse and volatile trades highlighted by the financial crisis. Experts warn that arbitrage is always around the corner.

"It's probably unnecessary to point out that the week we are going through is a decisive week for Europe. I think … we are showing that we are finding a response to the crisis," Michel Barnier, the EU Commissioner for the internal market said at a press conference yesterday (20 October).

The commissioner yesterday announced a series of measures to prevent high-frequency trading from causing volatility in markets and to stamp out abuses in a host of trades and platforms which have emerged since 2003.

He was also referring to a summit of EU leaders being held this coming Sunday to stem the rising tide of sovereign debt.

The financial crash in 2008 unveiled a swathe of financial practices which by definition circumvented regulation and have subsequently been identified as causing market distortions, such as high-frequency trading.

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See also:

Lord Turner attacks EU as clampdown is unveiled (Independent)