Case for unfettered financial markets

The City Research Project, a three-year study into London's competitive position in international financial services, publishes a key paper today on the structure of financial markets. The study is funded by the Corporation of London as one its i nitiatives in support of the City.

The latest paper looks at the case for public intervention in the London financial markets in general. The study is believed to suggest that the lack of centralisation in London's diverse markets is not a disadvantage, and there is little case for the authorities to take a prescriptive, centralising role. The most important feature remains competition between markets, which is the best way of meeting traders' requirements.

An interim report in 1992 raised concerns about defects in infrastructure, including financial regulation, tax, the use of technology and transport, that competition cannot be relied on to correct.