The commencement of the extraordinary saga (full rating): Matif's madcap yarn about the futures exchange market
In the 1980s, France faced a significant increase in its financing needs, amounting to 30-40 billion francs per year. Amidst this financial challenge, the Parisian exchange was lagging behind Chicago and London. It was during this time that the French government, under a left-wing administration, initiated the creation of a futures market for financial instruments in France - the Matif.
The Matif was born from the collaborative efforts of key figures such as Michel Rocard, the French Finance Minister, and Pierre Bérégovoy, who served as the Prime Minister. Their chief of staff, Jean-Charles Naouri, also played a significant role in its inception.
At the time, a committee of emissions at the Treasury decided who could emit among companies and the State. This committee was headed by Gérard Pfauwadel, an under-director at the Treasury before presiding over the Matif. The committee managed the waiting list for emissions, and the State's presence in the market would temporarily dry it up.
Fast forward to the present day, and Jean-Charles Naouri is currently the CEO of the Casino group. Pascale Besses-Boumard and Christele Fradin are the individuals involved in the ongoing discussion about derivatives regulation.
Derivatives markets, including the Matif, have been moving from unregulated to regulated, but the practice remains fuzzy. Regulation of derivatives is "à la carte" in Europe, with each country choosing what aspects to regulate.
However, the need for regulation became more apparent with the allegations of financial misconduct. For instance, Deutsche Bank was accused of hiding billions in losses on credit derivatives. This incident highlighted the need for stricter oversight and regulation in the derivatives market.
Finally, in 2011, Europe started regulating the huge derivatives market, marking a significant step forward in ensuring financial stability and transparency. The current financing needs of France are over 180 billion euros, emphasising the importance of a well-regulated financial market.
In conclusion, the creation of the Matif marked a turning point in France's financial market, paving the way for a more regulated and transparent derivatives market. The journey towards effective regulation continues, with the lessons from past incidents serving as valuable guides for the future.
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