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Editorial Autumn 2012 | www.bestexecution.net Editorial


Keeping score with Credit Suisse


J.P. MORGAN: ACCESSING LIQUIDITY KNIGHT: EMERGENCY MEASURES POST-TRADE: REDRAWING THE MAP


FIXED INCOME: NEW PLATFORMS, NEW HOPE?  Autumn 2012


Managing editor: Lynn Strongin Dodds Publisher: Ian Rycott Commercial director: Scott Galvin


Contributors: Dan Barnes, Mary Bogan, Heather McKenzie, Dina Medland


Photography: Scott Galvin, Gaston Batistini, Chris Mikami


Design & production: Siobhan Brownlow, RSB design


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© Best Execution 2012 All information and forecasts contained in this publication have been checked to the best of the author’s and publisher’s ability, but they do not accept any liability or responsibility for any errors, omissions or loss arising from decisions based on them. All rights reserved. No part of this publication may be reproduced without prior permission from the publisher.


www.bestexecution.net Best Execution | Autumn 2012


Lynn Strongin Dodds, Managing editor


Best execution means different things to different people – it all depends on your perspective. Despite the endless debates, discussions and regulation, best execution remains an elusive concept, but in its broadest sense best execution affects every stage of the transaction life cycle. From pre-trade, through trade execution to post-trade, if the clients’ best interests are not served then best execution hasn’t been achieved. In these uncertain times and as the tide of regulation rises ever higher and wider, Best Execution offers an in-depth analysis into the major trends that are shaping the fi nancial services industry as well as providing a more detailed insight into the technology driving new products and services being developed to meet these challenges.


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It is wishful thinking to believe this is just a temporary phenomenon and that the status quo will return once the good times start to roll again. The regulatory clampdown on risk taking, low trading volumes and intense scrutiny will ensure that investment banks stay on the reformation course. This does not mean though that the death knell should be sounded. They will continue to not only hone and develop new trading tools but they are also leveraging their experience into new asset classes such FX and fi xed income. As the markets continue to evolve, Best Execution will continue to


provide in-depth coverage of the trends that are shaping the industry. In this issue, we look at how banks are retuning their value propositions while Mary Bogan examines how the sleepy world of clearing and settlement industry is getting its own rude awakening due to OTC regulation. Heather McKenzie also assesses how market participants on the other side of the pond are undergoing their own transformation in the face of the impending Dodd Frank Act. It is expected that much of the action will take place in the swap execution facilities and organised trading facility arena. Dan Barnes explores how fi xed income trading platforms are coming into their own with new variations and platforms. This perhaps underlies what many people forget about the fi nancial service industry – its ability to innovate. It is very easy to get mired in the pessimism without remembering the industry’s ability to reinvent itself.


While it is a recurring theme, the shake-up in the investment banking world makes for sober reading. The once masters of the universe are fi nding they have little control over their own fate. The onslaught of regulation, prolonged economic downturn and the uncertainty over the eurozone is forcing them to change their direction. Some would argue that the restructuring is a long time coming and that bankers needed to come down to earth. However, the thud is reverberating across the world and investment banking will irrevocably change.


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