The Bank's targeted focus on fair and effective markets stems from the Fair and Effective Markets Review, which was produced jointly by the Bank, the FCA and HM Treasury and published in June 2015. The review analysed the way wholesale financial markets operate, with the aim of restoring confidence in the FICC markets following a number of high-profile abuses. The review made 21 recommendations to improve fairness and effectiveness in FICC markets. One was: ‘authorities should stand ready to help catalyse reforms held back by private sector co-ordination failures’.
In 2016, the Bank, FCA and HMT published a FEMR implementation report. This assessed progress made on each recommendation in the review. The implementation report concluded that significant progress had been made to implement the review’s recommendations. It stated that, in order to fulfil the recommendation to catalyse reforms, ‘the Bank and FCA will undertake work to proactively identify and review potential private sector co-ordination failures that may be holding back initiatives that could improve the fairness or effectiveness of FICC markets. The authorities will seek to catalyse market-led reform where it is needed.’
In 2018, the Bank, FCA and HMT published the FEMR Progress Report which set out the significant progress made in responding to the recommendations of the Review. The progress report concluded that ‘industry must take a leading role in monitoring developments and ensuring that market infrastructures and practices keep pace with innovation. The authorities stand ready to support industry’s efforts in this regard and catalyse reform held back by private sector co-ordination failures.