TAIPEI - Exchanges worldwide should play a greater role in the financial markets in the light of the global financial crisis, said Singapore Exchange (SGX) chief executive Magnus Bocker.
The financial crisis is really showing the importance of transparency, openness, integrity, trust and fair markets, he added.
Exchanges, by their very nature, cover a wide range of asset classes, and can do more to promote trust, transparency and good corporate governance.
Mr Bocker told The Straits Times: "Some of the issues we've seen since 2008 are markets being over-leveraged, opaque... these create a lack of trust and understanding.
"Exchanges that are open and transparent can add a lot of value to create better understanding, better pricing."
Mr Bocker was speaking on the sidelines of the World Federation of Exchanges' 52nd general assembly and annual meeting, which ended in Taipei yesterday.
The role of exchanges does not stop at just stocks these days.
He said: "You normally think about it as a stock exchange, but it's also in the futures market, the fixed income, FX (foreign exchange), different asset classes, sectors of the financial markets, where exchanges can add value to investors and other stakeholders."
One key challenge plaguing exchanges globally is the weak trading volumes.
Mr Bocker said: "Volumes are declining globally... it's a big risk to investors.
"With that follows a lack of liquidity and markets drying up, and investors are the ones who pay the price for that."
Having high-frequency trading would be one way of boosting liquidity in such times, he suggested, adding: "The declining volumes need to be mitigated by a better sense of systems.
"We need to support better liquidity, and high-frequency trading would be one. But we need to be clear on rules and the regulation for them."
Singapore has not been spared from the global volume decline, although its fate has been relatively better than those of its peers globally.
The average daily value of Singapore stocks traded fell 20 per cent in the three months ended Sept 30, but this corresponding figure fell an average of 32 per cent in Europe and 39 per cent in the United States during that period.
Mr Bocker said with regard to SGX's first-quarter volume: "It's not a healthy start... but on a relative basis, we are doing okay. If we haven't done all these things, I'm sure it would have been much worse."