Article: Is MiFID II really going to restore trust in banks and financial markets?19 April 2017 | Peter Farley
How much is it worth paying to restore trust in banks and financial markets? Well, I suppose you first have to establish how much trust in those institutions was lost as a result of the 2008 financial crisis.
Clearly regulators had to do something, given that such a liquidity and banking crisis happened on their watch, if only to restore trust in themselves as market oversight had also gone horribly wrong. But have they done the right things and will some of the regulatory incursions deliver unintended consequences that do more harm than good?
A regulatory tsunami
The reactions were swift, at least by regulatory standards, as American and European lawmakers, along with the likes of the Bank for International Settlements (BIS) moved to plug the gaps, or market deficiencies, they had identified. At the heart of a blizzard of new rules to emerge over the next eight years were measures that fell into two groups. The first was to better protect investors and the others to make banks safer and