The post-credit crisis era is over in financial markets. Easy-money policies around the world are coming to an end, interest rates are rising, volatility is returning, and what felt like endless market upswings are no longer assured.
If 2019 marks the start of a new era, a period of uncertainty will usher it in. Regulatory frameworks and technological innovations put in place since the crisis are, as yet, unproven under fire, and some trading desks are now run by people who were still in school when Lehman Brothers failed.
In this unsettled environment, Greenwich Associates today released its Top 9 Market Structure Trends for 2019, a list that includes:
Volatility Tests New Market Structure: The market structure built since the end of the global credit crisis might get its first real test in 2019.
The Death of LIBOR: Although the death sentence handed out to LIBOR in the wake of the rates manipulation scandal won’t officially be imposed for two years, the transition to new benchmarks like SOFR and SONIA will consume legal and operations teams for months to come.
Exchanges Grow in Importance (and Size): The importance of exchanges around the world has grown tremendously over the past decade, and 2019 will see them advance even further.
Data, Data and More Data: The data obsession within financial services is not over-hyped—not even close. The amount of data will only grow as we continue to scratch the surface in terms of ways it can be applied to making money in the markets.