After 2008 financial crisis, more and more people began to blame it for one of the reasons that caused the financial crisis. And this increasing concerns caused attention from governments.
3.4.1 Discussion and reforms of regulation at G20
In 2011, G20 was going to discuss its reforms and commitment. The Institute of International Finance (IIF) was asked by G20 leadership to bring up a review of the impact of financial investment on commodity price and volatility in order to provide policy makers with professional and private-sector views on this issue. The research was conducted by a group of market professionals, academics, and other private-sector researchers.
They believed that the evidence of a causal relationship between financial investment and price is not strong and even weak. Also, they held that speculation helps in processing the information between spot market and futures market. In other words, financial investment provides essential market information, increase liquidity and counterbalancing the positions which are beneficial to physical and financial. Hence, they concluded that policymakers should adopt lighter touch regulation which can increase transparency and trading reporting rather than some strict regulation
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United States was the first country to respond 2008 financial crisis and reform its regulation. In July 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act as a reform of regulation. Basically, this Act intended to decrease the risk and improve the stability of U.S. financial system by implementing the rules over several years. It aims at the reform of the institutional regulation and oversight work; regulation of banks, fund, and other financial institutions; rules for investor and rules for the consumer. Among all the regulations, I am going to analyse the changed regulation which has impact on the futures