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CME Group’s Terry Duffy discusses volatility, cybersecurity ahead of GFLC 2015

4 min read

Modern Money

Terry Duffy is the Executive Chairman and President of CME Group, which is hosting its annual Global Financial Leadership Conference next week in Naples, Fla. Mr. Duffy chatted with SmartBrief and shared more background on the GFLC.

Terry Duffy, Executive Chairman and President of CME Group

The Global Financial Leadership Conference is now in its 8th year … How has the event evolved?

The GFLC has evolved into one of the foremost events for leaders in our industry. This annual, two-day conference brings together some of the greatest minds in global economics and politics to discuss significant issues impacting our world. Over the years, we’ve featured former U.S. presidents, foreign heads of state, global business luminaries, and much, much more.

Virtually every speaker at GFLC comes from a field dealing with increased volatility. From geopolitics and financial markets to natural resources and media disruption, what are some of the keys to effectively handling volatility?

Volatility is a component of every market and has been since they were invented. It will continue to be a part of our business so it’s critical that end users be prepared. That’s one of the reasons we bring together global thought leaders at GFLC to provide valuable insight into the trends that are impacting us all.

When it comes to handling the global market volatility, that’s where CME Group comes into play. Risk management is more critical than ever as investors and corporations try to manage their portfolios through all economic climates. So providing our global clients with the products they need to manage their risk is critical.

Cybersecurity is a growing concern not just financial markets, but nearly every aspect of modern life. Where are the biggest opportunities for policymakers and the private sector to collaborate to enhance cybersecurity?

I couldn’t agree more. I’ve said for years that operational risk is the greatest threat to any business or marketplace – and cybersecurity is at the top of the list. That’s one of the reasons we developed a panel on cybersecurity. At this year’s event our participants will have the benefit of hearing from former senior administration officials Leon Panetta and Chuck Hagel and getting their perspective on what the main challenges are in the world of cybersecurity and ways to address them.

The impact of global financial regulatory reform continues to shake out across markets. What are some of the biggest trends you are seeing?

When global legislators and regulators responded to the 2008 financial crisis, their primary goals were to reduce systemic risk through centralized clearing and increase transparency through reporting and trading on regulated trading platforms, which essentially emulates our exchange model.

In the aftermath of Dodd-Frank, there was a lot of regulatory uncertainty. We have been able to work through a lot of it and are moving towards greater clarity. Regulators continue to provide additional clarity to these rules, which is good because market participants need to know the rules of the game so they can continue their risk management needs across all asset classes. It’ll be great for our attendees to get a first-hand regulatory update and global outlook from CFTC Chairman Timothy Massad.

From CME Group’s perspective, we have always been supportive of robust, fair regulation in the global financial markets as it is fundamental to the confidence of market participants. Equally fundamental is that regulation does not undermine innovation, competition and economic growth.

GFLC has a history of bringing together the greatest minds in politics and finance. Do you think there is a role financial markets can play in enhancing geopolitical stability?

I would argue that the stability of the U.S. financial system helps the nation maintain its dominant position in the global economy. Increased market instability could have a significant negative impact on the financial markets and, as I have said before, risk management is more important than ever.