Moynihan: Must Provide Liquidity Within Legislation

The transcript discusses the challenges and changes in market liquidity and volatility, particularly in the context of market making and the role of RDR. It highlights the impact of regulations like Dodd Frank on liquidity and market structure, noting that while leverage has decreased, it has led to reduced market activity. The discussion emphasizes the need for ongoing efforts to balance liquidity and regulation to avoid excessive volatility.

What is a key factor in trading during market volatility?

• The amount of liquidity support available

• The number of traders in the market

• The speed of transactions

• The diversity of trading platforms

What is the primary role of RDR in the market?

• To increase market volatility

• To reduce trading fees

• To provide liquidity as an agent

• To regulate market prices

How do capital restrictions potentially affect market volatility?

• By limiting liquidity provision

• By enhancing trading speed

• By increasing the number of trades

• By stabilizing market prices

What is a noted effect of reduced leverage in the system?

• Less market activity

• More trading platforms

• Higher liquidity levels

• Increased market activity

What is the ongoing responsibility of market participants regarding liquidity?

• To increase leverage

• To minimize trading hours

• To balance liquidity with regulatory requirements

• To maximize profits