An Analysis of Global HFT Regulation

HFT RegulationMotivations, Market Failures, and Alternative Outcomes

“Recent market events like the “flash crash” of 2010, algorithmic failures at Knight Capital, and the release of Michael Lewis’s book Flash Boys (2014)—with his claims that markets are “rigged”—have heightened scrutiny of high-frequency trading (HFT) and increased demands for more aggressive regulation. However, HFT has several empirically demonstrated benefits, and the current, largely qualitative arguments against it call for careful scrutiny of proposed regulations.

In a new study for the Mercatus Center at George Mason University, Holly A. Bell and Harrison Searles analyze the potential economic benefits of HFT and assess several proposed or adopted regulatory schemes from around the world.”

The full study is available from the Mercatus Center by clicking here

Holly A. Bell is an Associate Professor teaching business and economics at the Mat-Su College of the University of Alaska Anchorage in Palmer, Alaska. You can visit her website at www.professorhollybell.com or follow her on Twitter at @HollyBell8

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