The Wall Street Journal-20080126-The Buzz- NYSE Could Tackle Debt Pricing
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The Buzz: NYSE Could Tackle Debt Pricing
New York Stock Exchange owner NYSE Euronext is talking with regulators about whether it can bring more pricing information to opaque parts of the credit markets, Chief Executive Duncan Niederauer said.
Speaking Friday at the World Economic Forum in Davos, Switzerland, Mr. Niederauer said regulators have approached the exchange about becoming a pricing-and-quoting facility for illiquid and unusual instruments to improve market transparency.
"There is a severe lack of transparency in some of these instruments," he said. "There are questions from Washington: Are there things we should be doing around [providing] more transparency for these instruments?"
He said acting as a price- and trade-reporting facility would be "more of a social responsibility," rather than a profit driver for the exchange. The decline in the price of mortgage-related investments has triggered billions of dollars in write-downs and disputes about the prices of various fixed-income investments. Most bonds trade over the counter between private parties.
Exchanges have responded by considering ways to offer public, on- exchange versions of bond products so more people could see prices and make trading judgments. If successful, the project could build confidence and reduce instances of markets seizing up because no one can agree on a price.
