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29 June 2000
The Edmond Israel Foundation holds first conference on Capital Markets without Borders
A new book, Capital Markets Without Borders, sponsored by the Edmond Israel Foundation and Prométhée, was launched at a glittering gathering of European central bankers, politicians, Nobel prize winners and leading businessmen in Paris on Thursday, 22 June 2000, to mark the first annual conference on the subject of Capital Markets Without Borders.
The conference was held to examine the globalisation of securities markets and study the "triple challenge" of infrastructures, regulation and financial cultures.
The conference was opened by André Lussi, Chairman of the Edmond Israel Foundation, who said that, while many people felt that capital markets were already without borders, many barriers of a technical, regulatory and cultural nature still existed.
He said, "Indeed, in the book you have received, the President of the European Commission, Romano Prodi, and the Commissioner in charge of trade negotiations, Pascal Lamy, both emphasise that free markets cannot be separated for higher objectives and values such as the creation of an information society in Europe; the promotion and support of employment; the respect of the environment, and social progress."
These were also objectives and values that are fully in keeping with the broad mandate of the Edmond Israel Foundation.
An electronic vote taken amongst participants confirmed that the further integration of market infrastructures in Europe was needed and indeed is expected to happen within 3 to 6 years. Participants also voted that the desired governance for market infrastructures is for profit companies.
The keynote speaker at the conference was Sir David Walker, Chairman of Morgan Stanley Europe, who said Europe was in the middle of a "liquidity super-cycle", with an expectation that European market capitalisation will rise from just under 100 per cent of GDP to the present US level of 160 per cent over quite a short period.
"This is, so to speak, the equification of Europe. In the debt and credit markets, the transformation is being driven by factors such as the quest for yield and the funding of M and A activity," he said.
"But with the European bond market for non-government debt still less that 25% of that in the United States - in a similar sized economy - the potential for growth in corporate fixed income markets in Europe is huge."
He said it was easy to become "almost intoxicated" by the scale and vigour of this process, which promised good returns for those well placed to take advantage of opportunities."
Sir David Walker pointed out, however, that there was still much more to be done to make securities markets, technology and regulation interact more closely. He said they did not always act harmoniously or synchronously, and there were important gaps to be plugged.
"We are reminded daily of the relentless progress of technology, but the main problem here, unlike that in the world of medicine, is not whether technology exists to meet defined needs, but how to get available technology effectively in place. Within both individual firms and in the central agencies - exchanges and CSDs - that support the markets, capacity is widely under strain and we have been fortunate not to have suffered major market breakdowns."
As an example, Sir David Walker said it had been calculated that as much as USD 1 billion a year of operational cost savings would be secured if equity settlement in Europe were conducted as efficiently as in the United States.
The second annual conference is scheduled to take place in spring of next year.
For further information, please contact:
David Cowan or Yolande Theis
Clearstream International, Luxembourg
Tel: +352 45 11 03 20
Fax: +352 45 11 08 226
Email: ytheis.ci@clearstream.com
David Hardy or Paul Vann
Binns & Co Public Relations Limited, London
Tel: +44 207 786 9600
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Note to Editors
The Edmond Israel Foundation was created by Cedel International on 19 September 1990 in honour of Edmond Israel, upon his retirement after twenty years as Chairman of Cedel International's Board of Directors.
The Foundation is a non-profit making organization dedicated to the research and promotion of ideas of cultural, scientific, political and economic importance in the context of Europe. Its aim is to work within the framework of a changing Europe and to advance European thinking elsewhere in the world, thereby making a high quality contribution to the ongoing debates of our times and exploring themes of freedom, social responsibility and cultural identity. It aims to support and promote research and study and provide financial assistance and scholarship to promising individuals. Apart from commissioning studies, such as The Proposed Directive on Harmonisation of Taxation of Interest Payments published in January 1999, the Foundation presents the "Vision for Europe" award annually in recognition of ourstanding achievement and contribution to Europe. The 1999 recipient was Mr Willem F Duisenberg, President of the European Central Bank. Previous recipients were HE Mr Helmut Kohl, HE Mr Jean-Luc Dehaene, HE Mr Jacques Santer and HE Mr Jean-Claude Juncker.
Review copies of the book 'Capital Markets without Borders' can be obtained from Binns & Co Public Relations Ltd, 16 St Helen's Place, London EC3A 6DE, tel.: +44 207 786 9600