Borsa Italiana 2008 Market Review- Statements

Statements by Angelo Tantazzi, Chairman of Borsa Italiana, and Massimo Capuano, President & Ceo of Borsa Italiana

Dec 30 2008 - 15:30

“2008 was a tumultuous year for global financial markets and the economies they serve” said Angelo Tantazzi, Chairman of Borsa Italiana. “The credit crisis, which started in mid-2007, continued during the whole of 2008, accelerating in its effects in the last few months. Governments and Financial Authorities had to introduce extraordinary measures to try to restore confidence in financial instruments and regulations. These actions will be further refined in 2009 to the set up new outlooks for financial markets.

“Markets have been affected by investors’ aversion to risk, by the credit crunch and by unfavourable outlooks for economic growth. World stock markets have become the barometer of economies and the indicators for the health of the industrial and financial system.

“The crisis has flourished in the presence of instruments traded on non-regulated markets. Since the beginning, the crisis has highlighted the importance of regulated, exchange-based markets, which have continued to function properly during volatile periods, fulfilling their role in establishing and disseminating prices for exchange-traded instruments, guaranteeing transparency and providing liquidity to investors.

“Against this backdrop, in 2008 Borsa Italiana also celebrated its Bicentenary and realised its integration with the London Stock Exchange, which will help to unlock benefits for markets and the economy of our Country.”

“The financial market crisis and recession of major world economies made 2008 a year full of challenges for Borsa Italiana” affirmed Massimo Capuano, CEO of Borsa Italiana.

“To those challenges, Borsa Italiana responded taking opportunities offered by the merger with London Stock Exchange. That turned out into the renewal of the Group organisation, a widening offer of its markets and investments in trading platforms efficiency.

“In mid-November the migration of Italian equities onto TradElect, the Group’s trading platform, was successfully completed. The transition to the new system required significant effort by Borsa Italiana and a continuous collaboration with all intermediaries, enabling Italian operators to join the biggest European liquidity pool, with beneficial effects in terms of trading opportunities and market efficiency. Those benefits will be shared with Italian listed companies, which will be able to take advantage of a lower cost of capital.

“2008 also saw the introduction of AIM Italia, a small and medium enterprises market which takes advantage of near-14 year experience of AIM, by far the most successful market in this enterprise segment. AIM Italia will continue to establish its offering among suitable, high quality SMEs over the course of 2009.

“In November, electricity futures started trading on IDEX, the IDEM segment dedicated to these kind of instruments. The introduction of IDEX widens Borsa Italiana’s offering while opening its market to entities beyond the existing banks and brokers and giving Italian industry the opportunity to benefit directly from trading and managing risk on a regulated market granted by the presence of a central counterparty.

“In mid October, during the most acute phase of the crisis, the main exchanges in the world met in Milan, at Palazzo Mezzanotte (Borsa Italiana’s headquarters) for the Annual Meeting of the World Federation of Exchanges. Hosting the event was an honour for Borsa Italiana as well as for me as Chairman of the Federation. The meeting provided an occasion to underline how lack of transparency was one of the main elements generating and feeding the crisis. Transparency is one of the distinctive characteristics of regulated exchanges and represents one of the most important principles governing their activity. It is only from the basis of transparency and appropriate regulation that we can create the conditions of trust and confidence that will restore stability to, and the efficiency of, our financial markets.”

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