Financial Exchanges Forecast 2012

Seasons Greetings and  Good Luck in 2012.

1. Many Financial Exchanges will declare bankruptcy in 2012 creating a flurry of transnational merger of exchanges.

2. Financial Exchanges will move their trading engines to a shared technology infrastructure like cloud computing to bring down their technology cost.

3. Rating Agencies will play a major role by stabilizing global equity markets after the regulator tames their independence by introducing reforms in their rating methodologies.

4. Cloud will be predominantly used for algorithmic and similar computer driven trading, which will make markets operations  cost effective and profitable. 

5. SAAS (Software as a Service Models) will emerge for financial exchanges to use as a service, though it may face resistance from regulators, but this paradigm shift will make technology solutions for financial trading engines a commodity with a Opex budget and will find large scale adoptions by exchanges globally in but developed and developing markets.

6. Traders will stay ahead of Regulators and Exchanges and will continue to make money thus sustaining  the joys and rewards of trading in financial markets.

Sunset of Financial Rating Agencies

Rating Agencies were independently owned entities who added value by objective financial assessment of companies which they translated into Rating Symbols.
In the early 90's the Rating Agencies could not be independent anymore, they became attached to larger entities and  their ability to see clearly diminished.
Slowly their looking glass became opaque and their contribution to the financial world became more like a Mad Hatters Party and gradually they lost their credibility.
For want of any other alternative Rating Agencies continued to be used, like using a one eyed guide in a blind country. But today the truth is out and Rating Agencies have become an outcast in the world of finance.

Sunset at  Mumbai 

Here are five actions which may arrest the decline  of Financial Rating Agencies:

1. Disperse the shareholders of rating agencies and restore its independence.
2. The regulator must review  rating methodology used by the Rating Agency.
3. Rating committe meetings will be recorded on camera.
4. Punitive action for insider trading and biased rating.

5. Regulator to appoint experienced professionals to the Board and rating committees.

Sunset of Financial Rating Agencies is Imminent if they do not set their house in order on their own or with the help of the Regulator.
It will be a sad day when the Financial World discards the rating agencies who once  contributed to the advent of secure and stable markets.
Will the Rating Agencies weather the Storm and come out Clean?