Capacity Trade and Credit Full Report.City of London.2011.Summary
23 December 2011
Prepared by Z/Yen on behalf of the City of London Corporation, the Economic and Social Research Council (ESRC), and Recipco, this report looks at the feasibility and benefits of establishing a capacity exchange, or hub of capacity exchanges, in the UK to help facilitate multilateral reciprocal trade. While still at an early stage of development, the research concludes that such exchanges represent an untapped opportunity for London particularly if a more solid regulatory framework was put in place to encourage progress.
The report finds that London, which has long been a centre for diversity in trade and exchange because of its people, business environment, market access, infrastructure and general competitiveness, is uniquely placed to facilitate the expansion in scale needed for larger government and multinational organisations to utilise capacity trading more efficiently. The potential however depends on the level of trust that participants place in the exchange model and the common tender, as well as the levels of liquidity. A clearer, more solid regulatory framework might encourage more rapid development.