Business

The biggest challenge is a lack of confidence. Confidence is preventing businesses from investing significant amounts of their balance sheet strength, they simply do not feel they will get returns on that investment, and so they're holding cash.

Director-General of the Confederation of British Industry (CBI)

Not all financial contracts are created equal. We should not assume that there is one single benchmark for all types of financial transactions. There are certain transactions that should be based on market rates, and others which call for the kind of benchmark that LIBOR provides.

MIT Finance Professor & Pioneer of Quantitative Finance & Behavioral Economics

Once you're able to reduce the human element, and automate the reporting of these statistics- you will be greatly reducing the potential for misbehaviour. This is where regulators can leverage technology, reduce their burden.

MIT Finance Professor & Pioneer of Quantitative Finance & Behavioral Economics

It's definitely affected the psychology of the marketplace. It could not have come at a worse time. We have to deal with this expeditiously and make the system more robust to these kind of issues.

MIT Finance Professor & Pioneer of Quantitative Finance & Behavioral Economics

It certainly plays a much bigger role than was ever intended to. A number of financial institutions and contracts rely on LIBOR as the benchmark by which other rates are set. I don't think it was ever intended that LIBOR would play such a central role between so many institutions and contracts.

MIT Finance Professor & Pioneer of Quantitative Finance & Behavioral Economics

Financial markets depend on trust, and we had precious little trust as it was. The LIBOR scandal has done nothing to restore that trust. We have to do a lot more work on our regulations, procedures and regulators to re-establish that level of trust.

MIT Finance Professor & Pioneer of Quantitative Finance & Behavioral Economics

We have open and transparent pricing through our futures exchange- that means price is determined by buyers and sellers and not an 'official' selling price set by a producer.

The DME was a bit of a unique experiment, we created an exchange before all parts of the ecosystem were in place.

Even though Brent has been successful in terms of becoming a larger and more liquid benchmark, it is the 'least worst' option.

You are only ever one click away from looking at another alternative… The ability for the consumer to shop-around has made it difficult for some operators to realise the need for transparency in pricing… particularly when your product is built around opacity.

Travel is a market that will always do well, in the absence of one of two factors. Firstly… if the global economy goes soft- since travel is a discretionary spend- it will go soft faster than the rest of the economy.

The consumer is far better educated today than he ever was. Consumers don't need to rely on intermediaries to tell them what is good or bad- people are social, they share information with friends and strangers, and go to a broader community for help and assistance.

The industry is so big that it's difficult to give a general read of its state. It's a bit like saying 'what's the state of the global banking industry?' You could do a broad-brush and say that the banking industry is full of corrupt individuals intent on defrauding the world, or you could say that in some markets banking is doing very well- and in others it's doing terribly.

There's definitely a sense that regulators don't understand how firms operate and the practicalities of what they do- and hence that regulations won't help resolve the issues, such as governance issues, that are there.

Following the crisis, nobody actually pinpointed its cause and hence where the deficiencies were. There were knee-jerk reactions to say hedge-funds caused it with leverage, they're bad and must be regulated…. but nobody looked at the fact that the market created a load of products that nobody understood, and then failed to manage them properly.

The key danger is that regulators try to remove all the risk from the marketplace- this cannot be the case. There has to be risk in all these products, and if they try to remove them too much, they'll create vanilla products that simply cannot deliver.