The most dramatic effect of MF Global’s bankruptcy is being felt on the other side of the world from the company’s New York offices. Sheep farmers in Australia woke up on Tuesday morning to discover their wool futures market had closed down. MF Global accounted for 80 per cent of trading.
The story for larger markets such as oil, corn or copper markets is less extreme. But at futures exchanges around the world, one of the largest commodity brokers will not turn up for business today. When the London Metal Exchange opens its ring for the first trading session this morning, one fewer broker will take his seat on the red leather.
MF Global was, of course, more than just a commodities broker, but its size and scale in the relatively small world of commodities broking means its bankruptcy could reshape the industry.
MF Global’s demise felt by commodities exchanges