Bourse Consult has been commissioned on several occasions to assist in gathering and analysing evidence relating to public policy and industry decisions. In order to do this it has used its extensive experience of assessing the validity of views expressed by market practitioners. It is capable of determining which views are based on sound objective criteria and which are based on a desire to maintain market share. The results of these commissions have often influenced major initiatives by governmental bodies such as the European Commission and HM Treasury in the UK.
Case Study: Renminbi
With the rising importance of the Chinese economy and of trade with China, banks in London had been lobbying the UK government to support the creation of an active market in renminbi-denominated financial products in London. The government asked the industry to develop a collective view of how best to develop London as a Renminbi Centre. Bourse Consult was engaged by the City of London to synthesise the collective view of the finance industry and to use its expertise in market infrastructure to recommend how best to clear and settle renminbi trade originating in London. The recommendations we made catalysed a co-ordinated series of initiatives across industry and the governmental authorities. These initiatives contributed to the significant growth of London renminbi business and a public declaration from the Chinese government that it would support London as a Renminbi Centre.
Bourse Consult was subsequently engaged by the City of London to prepare regular, published reports quantifying the changes in volumes of renminbi-denominated products and services being originated in London.
Case Study: World Bank
Bourse Consult was commissioned by the World Bank to prepare a report on how the arrangements for clearing and settlement affect international investors’ appetite to invest in domestic government bonds in emerging markets. We developed a framework of structured interviews which we conducted with finance ministries and central banks to understand their policies and objectives; and with asset managers, global custodians and the two international CSDs to understand the factors taken into account when investors decide whether to invest in domestic government bonds and how to do so. Using the results of these interviews and our own knowledge of the industry, we prepared a final report for the World Bank to distribute to the finance ministries that had commissioned it.
Case study: Analysing market developments
The City of London has a highly regarded programme of publishing research papers on developments affecting London’s financial markets. It has commissioned Bourse Consult to prepare several papers for this programme, including an assessment of the exchange consolidation process (for a confidential study), an assessment of the state of clearing and settlement in Europe, an assessment of the financial infrastructure supporting London’s markets and an assessment of issues relating to the role of OTC Derivatives in the financial crisis of 2008. All these papers have helped to shape policy in their respective areas.
The research was based on interviews with market participants, using the seniority of the Bourse Consult consultants to obtain access to high-level executives in market firms. While protecting the anonymity of the interviewees, the consultants combined the results of these interviews with their own knowledge and experience to prepare the final reports, which were published by the City of London.
Case study: Evaluating counterparty relationships
A European central bank wanted an appraisal of its relationships with market counterparties. It commissioned a Bourse Consult consultant to prepare an assessment. The consultant conducted confidential interviews with senior executives in market firms, who were able to speak frankly on the basis that their comments would be reported anonymously. The central bank made a number of improvements to the way it managed its relationships with market counterparties, based on the consultant’s recommendations.