FESE Comments On The Credit Crisis

The ongoing credit crisis has revealed a need for a re-adjustment of focus in the public policy discussion on the question of public versus non-public market models, the treatment of different asset classes and their role in the capital-formation process.

FESE Members’ ‘public market’ model has not only shielded their products from the crisis but has helped the investors and industry participants to alleviate some of the consequences by providing an efficient mechanism for asset pricing. The FESE Members’ concern going forward is that the strengths of this market model are safeguarded by the future policy framework and taken into account in any lessons drawn after the ‘dust has settled’ and the analysis of the crisis is complete.

The challenge for policymakers is to assess whether the legislative framework creates a sufficiently level playing field between market models and the attractiveness of the asset classes that they trade.

FESE Members are confident that they will be able to make a positive contribution to this debate, particularly in the light of the recent reports of the ECOFIN, the FSF and the IMF. Non-organised, private markets should be a central part of any follow-up to these reports and that further work should be carried out on this subject to identify the needed improvements towards the orderly functioning of these markets. FESE offers itself and its Members as a source of expertise in considering the case for, and the shape of, policy responses to the current financial crisis.


FESE Note on the Credit Crisis_April 2008.pdf