FM: What is the future of forex markets, both futures and over-the-counter?
LM: It is huge. It is the one market that never stopped growing. Many markets have waxed and waned; not this one. This one keeps going because of the globalization of the world. Look at what is happening to the euro. Isn’t that the number one issue facing the world? The value of the euro, will it exist? I do know that when China’s renminbi becomes [flexible], which will be soon, three years at the most, that will create enormous activity in the currency markets. All I can see is continued growth.
FM: The futures industry may be facing one of its more challenging periods. The MF Global debacle shook the industry and PFG showed that the customer protection problems MF Global revealed could not be dismissed as a one-off event. How serious is the crisis of confidence?
LM: Not as serious as the press is making it out to be. There is a bit of a shake-up, and remember the reason the event was as stark as it was, is because we went for more than 150 years without a problem; we went through the meltdown of 2008 [without a problem]. The fact that our industry in the downfall of Bear Stearns, Lehman Brothers and AIG and everything else held strong, that says a lot and that hasn’t changed. Now, I grant you that we have MF Global, but that is a consequence unfortunately of current times and so is the PFGBest thing, and it did shake up [the industry]. It is serious enough for the CME to do something about it. We cannot ignore it. We already have instituted some immediate changes that deal with how fast we will have to learn if the clearing member moves some money around, and we have put on the table a number of ideas that include a custodial concept. There will be other things on the table. We are going to study this so that we don’t make a mistake. When we come out of it, we will come out of it with a much stronger, secure system of segregated funds for the customer. We have to. It happened, and we can’t ignore it.