An Italian Crisis: This is what our customers are dealing with right now What we hear from Trading desks on the ground in Europe

By Patrick Chambeau, Director of Marketing, IPC

Earlier this week, I was visiting some customers in Paris speaking to Traders, Heads of Desks and other people on the floor from various part of the financial ecosystem in France and Europe overall: institutional investors, asset managers, brokers, and investments banks to name a few. We intended to have conversations around technology, innovation and how we could help them achieve their digital transformation goals with our solutions, however, the conversation very quickly went directly to the immediate challenge they were dealing with: the Italian crisis. As everyone knows, this is a period of extreme political uncertainty and I can confirm that we felt it on the floor when speaking with traders.

What is Italy’s political crisis?  And why does it matter?

  • Italy has plunged into crisis mode after several weeks of protracted negotiations between anti-establishment groups ultimately failing to produce a new coalition government.
  • Italy’s economy, the euro zone’s third-largest, has been anemic for a long time. That’s been a significant concern for the EU as well as global markets more broadly.
  • For the first time since World War II, Italian populists are on the brink of securing an unprecedented popular mandate to govern the country.

Why this situation creates stress, but maybe opportunity as well?

Volatility fuels the financial markets through uncertainty. It stems from cycles, speed, “infobesity” and the systemic global world in which we are now living. This was the case with,  for example, like the Swiss franc being uncapped from the Euro a couple of years ago, Brexit, the U.S. elections,  these incidences saw a lot of flash crashes in different asset classes and the general political uncertainty.

So with this level of unexpected events, and, for traders, in volatile and stressed market conditions, you need to have access to a diverse ecosystem and a diverse community. Having access, via a dedicated network and trading communications systems, to a very diverse group of market participants — not only buy side, sell side, trade life cycle providers, inter-dealer brokers, market data providers and exchanges — but also within the buy side, very different types of firms that have different trading needs. This proves critical and vital during very volatile market conditions. So traders can find their counterparty more easily, to execute their trades, especially during difficult times when, for instance, everyone is rushing or panicking…there might be someone who is willing to take the other side of the trade.

To no one’s surprise, there is an increasing demand for liquidity in financial markets and most firms appear to want to maintain constant market access and liquidity.

How can IPC help? By Providing Access to a diverse Financial Ecosystem and Community

In discussing IPC’s value with our customers, everyone recognizes that IPC’s unique holistic approach to helping counterparties to connect, exchange information, mitigate risks and leverage state of the art network technology is vital particularly in today’s trading environment, which is speedier and more complex than ever before.

Traders expect to be supported by reliable trading technology partners around the world and cannot afford to have connectivity issues hinder generating alpha, sourcing liquidity or mitigating risk.  Solely focused on these critical trading communications demands, IPC’s Financial Markets Network (FMN) is a high-performance Network-as-a-Service for data, voice and enterprise connectivity.  We help firms trade faster, scale rapidly, and achieve greater agility, productivity and efficiency, resulting in a competitive advantage.

IPC’s Financial Markets Network interconnects global financial centers and enables access to one of the world’s largest and most diverse financial ecosystems with more than +7,000 market participant locations across 700 cities in more than 60 countries.

About IPC

IPC is a technology and service leader powering the global financial markets. We help clients anticipate change and solve problems, setting the standard with industry expertise, exceptional service and comprehensive technology. With a customer-first mentality, IPC brings together one of the largest and most diverse global financial ecosystems spanning all asset classes and market participants. As the enabler of this ecosystem, IPC empowers the community to interact, transact and react to market changes and challenges, and we collaborate with our customers to help make them secure, productive, compliant and connected. Visit ipc.com and follow us on Linkedin and Twitter (@IPC_Systems_Inc).

Please find this article on FINEXTRA:
https://www.finextra.com/blogposting/15418/how-is-the-italian-crisis-impacting-the-trading-floor

© 2018 IPC Systems, Inc. All Rights Reserved. The contents of this publication are intended for general information purposes only and should not be construed as legal or regulatory advice.