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Price Formation in Commodities Markets: The World After Financialisation

CEPS Conference Room
1, Place du Congrès 1000 Brussels
CEPS Event

Price Formation in Commodities Markets: The World After Financialisation


Launch of a CEPS-ECMI Task Force Report

Markets are in constant flux and commodities markets are no exception. Their market structure has evolved at an incredible pace over the past decade, driven by soaring international trade, easier access to international finance and technological developments in trading infrastructure. While the commodities super-cycle appears to be fading away, barring a shift in regulatory policy, the interaction between the physical markets and the financial system is likely to remain strong for the foreseeable future. Due to accommodating monetary policies and financial deregulation, the high returns generated by growing international trade fuelled by demand emanating from emerging industrial economies have attracted the interest of financial institutions hoarding cash for what has been commonly perceived as an anti-cyclical asset class. Financial leverage has been therefore instrumental in the development of international trade and empirical evidence points at the benign role of speculation in the long-term, but it is more controversial in the short-term. More interaction with the financial system also means easier access to financial leverage by commodities firms, and in particular by trading companies, which may have become ‘too-physical-to-fail’. The combined effects in the last decade of international trade, monetary policies, and technological developments in market infrastructure have made physical markets more interconnected among them and more intertwined with the financial system. The new market structure intensifies the magnitude of non-financial and financial shocks, even if they take place in a small region of the world. Click here to see the programme.

  • Participation in ECMI-CEPS meetings is a benefit of ECMI and CEPS membership. ECMI and CEPS members can register free of charge.
  • Members of the Task Force, EU and national officials, academics and students, NGOs (not representing a commercial interest) as well as press are also admitted free of charge.
  • Other participants may be admitted for €175 (21% VAT included, payable via online registration secure platform). If you have questions regarding membership or participation please contact karin.lenk@ceps.eu before registering.