Increased participation in London Metal Exchange price discovery does not necessarily translate into improved pricing quality, the chief executive officer of Sucden Financial has said.
Marc Bailey told the virtual Fastmarkets Copper Seminar that a key problem with the
LME's discussion paper on market structure was a link in the thinking that liquidity and transparency are the same thing.
"I would take issue with that [thinking]. I think you can be transparent without being liquid and liquid without being transparent," he said.
"The point I'm trying to make is that we should be looking at the quality of the reference prices and benchmarks, not just the contributing factors that go into them. To say there are more people participating, in my view doesn't necessarily mean that the quality of the reference price is any better," he added.
The LME has released data showing that the number...