of rules is calibrated in a way that avoids excessive market liquidity distortions, in particular in those market segments whose functionality is still partially impaired as a consequence of the market disruptions that we have witnessed over recent years. with this in mind, the ecb explicitly welcomes private sector initiatives such as the afme framework for post trade transparency, which i believe is a constructive proposal because it aims to fine - tune the reporting requirements across different liquidity categories, something that is certainly a sensible approach given the economic trade - off i have just outlined. concluding remarks so, i will now conclude my keynote address, and i look forward to participating in what i am sure will be an interesting panel discussion. de frutos, m - a. and manzano, c., “ trade disclosure and price dispersion ”, journal of financial markets, vol. 8, no 2. pp. 183 – 216. see goldstein, m., hotchkiss, e. and sirri, e., “ transparency and liquidity : a controlled experiment on corporate bonds ”, the review of financial studies, vol. 20, no 2, pp. 235 - 273, and edwards a., harris, l. and piwowar, m., “ corporate bond market transaction costs and transparency ”, the journal of finance, vol. 62, no 3, pp. 1421 – 1451. see naik, n., neuberger, a. and viswanathan, s., “ trade disclosure regulation in markets with negotiated trades ”, the review of financial studies, vol. 12, no 4, pp. 873 – 900. bis central bankers ’ speeches

managers contact group ( see the ecb website for more information on these groups ). see ecb opinion of 22 march 2012 on ( i ) a proposal for a directive on markets in financial instruments repealing directive 2004 / 39 / ec of the european parliament and of the council, ( ii ) a proposal for a regulation on markets in financial instruments and amending regulation [ emir ] on otc derivatives, central counterparties and trade repositories, ( iii ) a proposal for a directive on criminal sanctions for insider dealing and market manipulation and ( iv ) a proposal for a regulation on insider dealing and market manipulation ( market abuse ) ( con / 2012 / 21 ). see e. g. madhavan, a., “ consolidation, fragmentation, and the disclosure of trading information ”, the review of financial studies, vol. 8, no 3, pp. 579 - 603 and bloomfield, r. and o ’ hara, m., “ can transparent markets survive? ”, journal of financial economics, vol. 55, no 3, pp. 425 – 459. bis central bankers ’ speeches opacity enables the extraction of rents and can lead to increased price dispersion7, with negative consequences for market integrity and fairness. furthermore, a low level of posttrade transparency can significantly distort the informational role of prices by preventing the diffusion of value - relevant information, which may hamper market liquidity because of adverse selection. in line with this rather positive view of post - trade transparency, a number of empirical studies8 have found that the introduction of mandatory trade reporting has significantly improved formerly opaque market segments, such as the market for us corporate bonds. at the same time, one must be aware of potentially negative side effects. for example, liquidity providers may be reluctant to take on a large inventory position because they will find themselves in an unfavourable bargaining position if this information is known to others. they may ask for an additional premium in order to take on such a risk, which can raise transaction costs for investors. 9 similarly, very large market participants, such as pension funds, may find it more difficult to execute large transactions without being front - run by predatory traders. in very transparent markets such as those for equities, this has become a substantial concern. with these issues in mind, it is imperative that the new regulatory environment carefully considers all possible implications of increased market transparency. in particular, it is important that the new set