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Benedicte Gravrand, Opalesque London:

All participants at the Opalesque roundtable in London in June had something to say about the developing financial regulations; some of the criticisms touched on short-selling and derivatives restrictions cutting managers’ wings, exchanges that are likely to have to submit more listings, large unanswered issues such as systemic risk and too-big-to-fail groups, the global lack of regulatory coordination, and probable greater interference from the part of regulators.

Restrictions on short-selling and CDS Louis Gargour, founding partner and CIO of LNG Capital, an alternative European credit manager, has significant reservations about the current regulatory changes. Of the key themes he sees coming out, the first one is restricted short-selling.

“I believe that liquid functioning markets with no restrictions offer investors in the long-term the best opportunity for unfettered returns. Restricting short selling is simply restricting the ability of an investor who has identified a weak balance sheet, a compromised business plan, or other factors from exiting from his analysis,” he said. “I do believe certain circuit breakers need to be in place in order to avoid dislocated markets and the commensurate systemic risk associated with liquid non-functioning markets.” (See latest Opalesque Exclusive on LNG ......................

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