Banks not ready to aggressively enter energy trading market

NEWTON, Mass., Sept. 6, 2001 – Banks will have to wait for the major players – energy firms – to bring the energy trading market on a par with the financial products markets, says a new report from Meridien Research.

There are a number of issues that must be resolved before financial institutions move aggressively into this market including: open or low-cost distribution of raw data, development of standardized hedging products, greater credit reporting of energy-dependent firms, creation of centralized clearing and settlement systems and greater marketplace competition.

“Energy trading markets today don’t have the level of sophistication that most financial traders are accustomed to,” said Damon Kovelsky, analyst at Meridien Research. “These markets are in their infancy and lack the infrastructure that established markets have built up over the years. We believe that as more and more pieces of the puzzle are put in place, financial institutions will begin to express more interest in this emerging market.”

“Energy Trading and Wall Street: Banks Need a Jump-Start” is a comprehensive look at the energy trading marketplace, the players involved, success factors in market entry by financial institutions and adoption factors as well as “what to watch”.

Copies of the report can be purchased by calling (617) 796-2800 or via email to

About Meridien Research

Meridien Research of Newton, MA, provides analytical research services to users and providers of financial industry technology. Meridien Research targets three technology areas of strategic importance to financial services firms: eFinancial Services, Trading & Risk Management and Customer Relationship Management. Each practice delivers reports detailing new issues and challenges and uses its knowledge to advise clients in technology related decisions.

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