The appetite and sense of urgency for world financial reform have waned as markets have rebounded and the world economy has shown signs of recovering, the head of exchange operator NYSE Euronext
Duncan Niederauer told Reuters the emotion surrounding the overhaul of banks and capital markets has also faded. He said a calmer approach could produce more rational legislation as lawmakers and regulators globally move to avoid a repeat of the financial crisis.
There's certainly less urgency to change and less appetite for change, Niederauer said in an interview on the sidelines of the Futures Industry Association's annual conference here.
The capital markets are healthier, the economy at least is purportedly to be on the road to recovery. So I think it has definitely taken some of the urgency out of the equation, and it's also taken some of the emotion out of the equation.
The United States, the European Union and others continue to debate and craft new rules, some of which face stiff industry resistance. U.S. Sen. Christopher Dodd, chairman of the Banking Committee, said earlier on Thursday he would present his own version of a financial reform bill after compromise talks with Republicans collapsed.
I think (the bill) is actually going to be a much better read than it would have been a year ago, Niederauer said.
A year ago it would have felt more aggressive, much more over-reaching, much more emotional. I think if there's any good news in the markets having rallied last year, it's calmed everybody down to where I think the approaches that are being taken are more rational, he added.
NYSE Euronext runs cash equities and derivatives exchanges and clearinghouses on both sides of the Atlantic. It could benefit as more over-the-counter products are mandated to be cleared and exchange-traded, but could suffer if regulators restrict bank proprietary trading or impose a new transaction tax.
The Senate bill is expected to tighten bank and capital market oversight, and include measures for consumer protection, systemic risk, and an OTC derivatives crackdown. The European Commission is expected to publish a draft law on derivatives clearing by July.
It's hard to imagine that 18 months after the crisis really nothing has been changed, said Niederauer, a former Goldman Sachs Group Inc
(Reporting by Jonathan Spicer; editing by John Wallace and Matthew Lewis)