Big money managers said to launch a dark pool…

I’m not sure how this is good news for the liquidity of financial markets. First we had the regulatory pressure on exchanges to open them to competition, which split away the liquidity and has made it more difficult for money managers to buy/sell even equities.

Second we had the regulatory pressure on insurers, banks, pension funds to limit their risk appetite with contracyclical rules (which basically says: « you have to buy bonds when they are expensive and sell equities when they are quite cheap »).

So now, big money managers (Fidelity, etc…) are said to organize dark pools which would exclude hedge funds and investment banks (good thing) but in the end would reduce overall market liquidity. Imagine what will be left to individual investors if this project goes through and goes global…