And so this year's SIBOS begins here in Amsterdam, and I'm up bright and early for a 7:30 meeting which is 6:30 UK time … yawn!
First main session of the day is a discussion of securities and market infrastructures with the folks who lead various clearing and settlement firms. There's Phil Brown, Member of the Board of Clearstream; Jan Bart de Boer, who heads up ABN AMRO's Clearing Bank; Drew Douglas, Head of HSBC's Securities Services; Valerie Urbain, CEO for Euroclear; and Tom Zeeb, CEO of SIX Securities Services.
In true SIBOS style, there were lots of preparatory calls and emails before this panel, which I was chairing, but in true Skinner style I didn't reveal the questions I was going to ask the panel members until they were sitting under the spotlights.
This meant there were lots of chewing of lips in nervousness, as the opening statements debated the pro's and con's of creating a single, global market infrastructure for post-trade clearing and settlement.
The dialogue actually said this would never be achieved as it's just too difficult due to national laws on tax and fiscal policies. For example, Europe cannot even agree on a harmonised approach to Corporate Actions. As a result, global market infrastructures are just not viable.
To reinforce this view, the fact that the Giovannini barriers still exist and that most of them have little to do with the CCP's but are far more to do with member state policies on Corporate Governance, means that the technology, standards, interoperabality etc, is not the issue. It's the laws that are the issue.
But even if you did have laws that enabled global platforms, they would not exist as competition is needed to create efficiency.
There's not enough competition in this space, as providers have clear boundaries and definitions which allows them to protect their turf.
However, consolidation may begin thanks to things like T2S (Target2 for Securities) from the European Central Bank, due to go live in 2014. There is a view that this will be a game-changer as it challenges the Central Securities Depositories (CSDs), who will need to move up the supply chain and make themselves more worthwhile.
Alan Cameron, Head of Securities Services at BNP Paribas, likened this to an overweight market that needs to shape up. The choice is to diet, which is hard to keep up; exercise, which is dangerous if you're unfit; or liposuction, which may be the only way to achieve consolidation as it is dictated by a regulatory shift.
The fat market model of today's clearing and settlement stuck in my mind as an interesting analogy, for whenever there is inefficiency, some new competition should arise.
Towards the end of the panel, we also got into some chat about OTC Derivatives and other areas.
As blogged the other day, there will be questions regarding the definitions of 'systemic risk' versus 'commercial risk' in this area. Although this is currently a key question in the OTC Derivatives space, these definitions could become pervasive across all clearing and settlement.
Along with discussions about codes of conduct, linkup alliances, automation and standardisation it was a good debate.
Nevertheless a little disappointing as none of the panellists believe consolidation will take place in this space, even though it would be desirable and good for the industry.
Ah well, onwards and upwards, and over to Innotribe for the next part of the SIBOS experience.