Position limits will feed risk into real economy, say energy companies
Energy market participants have expressed doubt that European position limits proposals will achieve reductions in market volatility, and warned of unintended consequences for end-users' risk management
The position limits proposals in the European Commission's Markets in Financial Instruments Directive (Mifid) review will feed risk into the real economy if implemented, said energy firms at a conference in London yesterday.
"If there's a hurricane in the Gulf of Mexico, and you had to divert a cargo from the east into the Gulf, and you haven't got the hedge exemption to lay that risk off somewhere in the market, or were not able to do that because of the hard position limits, that just then
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