A Framework for Responsive Market Regulation

2018 ◽  
pp. 332-358
Author(s):  
Timothy Baikie ◽  
Tracey Stern ◽  
Susan Greenglass ◽  
Maureen Jensen
Keyword(s):  
Capital Markets ◽  
High Frequency ◽  
High Frequency Trading ◽  
Market Regulation ◽  
Business Decisions ◽  
Regulatory Climate ◽  
Recent Developments ◽  
The Impact ◽  
Regulatory Landscape

This chapter submits that a regulator’s raison d’être is not simply to react to market issues but to be proactive and to follow and to understand the changes and the business decisions in the market. Regulators must be able to change and foster a responsive regulatory climate that allows innovation to occur, while ensuring that core principles such as investor protection are preserved and that the impact of any change is monitored. To that end, the chapter highlights the role of the Ontario Securities Commission in the Canadian regulatory landscape, and details how it has addressed the multitude of challenges posed by recent developments in Canadian capital markets, including the growth in dark liquidity and the emergence of high frequency trading.

Global Algorithmic Capital Markets

2018 ◽  
Keyword(s):  
Public Policy ◽  
Capital Markets ◽  
Systemic Risk ◽  
High Frequency ◽  
Investor Protection ◽  
High Frequency Trading ◽  
Market Making ◽  
Market Governance ◽  
Policy Objectives ◽  
The Impact

This book illustrates and assesses the dramatic recent transformations in capital markets worldwide and the impact of those transformations. ‘Market making’ by humans in centralized markets has been replaced by supercomputers and algorithmic high frequency trading operating in often highly fragmented markets. How do recent market changes impact on core public policy objectives such as investor protection, reduction of systemic risk, fairness, efficiency, and transparency in markets? The operation and health of capital markets affect all of us and have profound implications for equality and justice in society. This unique set of chapters by leading scholars, industry insiders, and regulators sheds light on these and related questions and discusses ways to strengthen market governance for the benefit of society at large.

The Role of Financial Innovation in EU Market Integration and the Capital Markets Union

2018 ◽  
Author(s):  
Emilios Avgouleas
Keyword(s):  
Capital Markets ◽  
Risk Sharing ◽  
Market Integration ◽  
Financial Innovation ◽  
The European Union ◽  
Recent Developments ◽  
Capital Markets Union ◽  
Critical Overview ◽  
The Eu

This chapter offers a critical overview of the issues that the European Union 27 (EU-27) will face in the context of making proper use of financial innovation to further market integration and risk sharing in the internal financial market, both key objectives of the drive to build a Capital Markets Union. Among these is the paradigm shift signalled by a technological revolution in the realm of finance and payments, which combines advanced data analytics and cloud computing (so-called FinTech). The chapter begins with a critical analysis of financial innovation and FinTech. It then traces the EU market integration efforts and explains the restrictive path of recent developments. It considers FinTech's potential to aid EU market integration and debates the merits of regulation dealing with financial innovation in the context of building a capital markets union in EU-27.

The Role of Data Analytics and Machine Learning in Resurrecting Inductive-Based Accounting Research

2021 ◽  
Vol 9 (2) ◽  
pp. 1-19
Author(s):  
Lawrence A. Gordon
Keyword(s):  
Machine Learning ◽  
Empirical Evidence ◽  
Data Analytics ◽  
Accounting Research ◽  
Recent Developments ◽  
Important Trend ◽  
The Impact ◽  
The Way

The objective of this paper is to assess the impact of data analytics (DA) and machine learning (ML) on accounting research.[1] As discussed in the paper, the inherent inductive nature of DA and ML is creating an important trend in the way accounting research is being conducted. That trend is the increasing utilization of inductive-based research among accounting researchers. Indeed, as a result of the recent developments with DA and ML, a rebalancing is taking place between inductive-based and deductive-based research in accounting.[2] In essence, we are witnessing the resurrection of inductive-based accounting research. A brief review of some empirical evidence to support the above argument is also provided in the paper.   

The Impact of High-Frequency Trading in Experimental Markets

2020 ◽  
Vol 29 (4) ◽  
pp. 7-18
Author(s):  
Nathanael Berger ◽  
Mark DeSantis ◽  
David Porter
Keyword(s):  
High Frequency ◽  
High Frequency Trading ◽  
Experimental Markets ◽  
The Impact

scholarly journals DOES SPEED MATTER? THE ROLE OF HIGH‐FREQUENCY TRADING FOR ORDER BOOK RESILIENCY

2020 ◽  
Vol 43 (4) ◽  
pp. 933-964
Author(s):  
Benjamin Clapham ◽  
Martin Haferkorn ◽  
Kai Zimmermann
Keyword(s):  
High Frequency ◽  
High Frequency Trading ◽  
Order Book

The Baring Crisis and the Brazilian Encilhamento, 1889–1891: An Early Example of Contagion Among Emerging Capital Markets

2005 ◽  
Vol 12 (2) ◽  
pp. 199-225 ◽  
Author(s):  
GAIL D. TRINER ◽  
KIRSTEN WANDSCHNEIDER
Keyword(s):  
Financial Crisis ◽  
Capital Markets ◽  
Capital Flows ◽  
International Markets ◽  
Money Markets ◽  
Bond Yield ◽  
History Of ◽  
Emerging Capital Markets ◽  
The Impact

This article assesses the role of international markets in the brazilian financial crisis of 1890/91 (the crash of the encilhamento). It looks for the impact of the argentine financial crisis in 1890 (the baring crisis) on brazilian access to capital markets. The history of bond yield fluctuations in london for brazilian and argentine debt, exchange rates, data on investment flows and archival and journalistic accounts reveal a close congruence between the argentine and brazilian crises. The effects of the argentine experience carried over to brazil because the open capital and money markets of the period easily transmitted crisis from one economy to another and because fundamental conditions in both economies rendered them similarly vulnerable to fluctuations in capital flows. The article raises this case as a precedent for the contagious financial crises that emerging markets faced at the end of the twentieth century.

High-Frequency Trading and Conflict in the Financial Markets

2017 ◽  
Vol 32 (3) ◽  
pp. 270-282 ◽  
Author(s):  
Ricky Cooper ◽  
Jonathan Seddon ◽  
Ben Van Vliet
Keyword(s):  
Financial Markets ◽  
High Frequency ◽  
High Frequency Trading ◽  
Market Makers ◽  
Market Participants ◽  
Software Vendor ◽  
Traditional Market ◽  
Recent Developments ◽  
The Way

The last few decades has seen an ever-increasing growth in the way activities are productized and associated with a financial cost. This phenomenon, termed financialization, spans all areas including government, finance, health and manufacturing. Recent developments within finance over that past decade have radically altered the way trading occurs. This paper analyses high-frequency trading (HFT) as a necessary component of the infrastructure that makes financialization possible. Through interviews with HFT firms, a software vendor, regulators and banks, the effects of HFT on market efficiency, and its impact on costs to long-term investors are explored. This paper contributes to the literature by exploring the conflict that exists between HFT and traditional market makers in today's fragmented markets. This paper argues that society should be unconcerned with this conflict and should instead focus on the effects these participants have on the long-term investors, for whom the markets ultimately exist. In order to facilitate the best outcomes, regulation should be simple, aimed at keeping participants’ behavior stable, and the interactions among them transparent and straightforward. Financialization and HFT are inextricably linked, and society is best served by ensuring that the creative energy of these market participants is directed on providing liquidity and removing inefficiencies.

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