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In publishing its final report, the Fair and Effective Markets Review has set out twenty-one recommendations which are designed to restore trust in the wholesale Fixed Income, Currency and Commodity (FICC) markets. Set up in 2014, the Review has taken place on the back of a “lack of firm governance and controls, acceptable standards of market practice and a culture of impunity” all of which according to the report’s summary contributed to a process of ‘ethical drift.
The recommendations have been structured to meet four near-term actions to improve conduct in FICC markets and two principles which will guide a more forward-looking approach. These include raising the standards, professionalism and accountability of individuals; strengthening regulation and promoting fairer market structures.
The report, which runs to over 100 pages, provides a comprehensive insight into the practices which led to a crisis of confidence in the market. Whilst its recommendations are wide-ranging, the report’s authors acknowledge that there is scope for further research into “a number of rather deeper questions about the underlying drivers of behaviour in, and structure of, FICC markets.” To this end an Open Forum is planned to take place at The Bank of England in the autumn which will give a broad range of stakeholders the opportunity to discuss recommendations and potential research themes.