Since the election, stock prices have risen sharply on hopes that a wave of pro-growth policies under Donald J. Trump will drive up equity prices even further. But Mr. Trump’s administration will soon face a trend that threatens to move the long-term benefits found in stock markets away from investors and toward exchanges. Continue reading …
Who Benefits From Market Speed Bumps? The Exchanges Read More »
This article was originally posted on TabbForum here By Holly A. Bell Former Secretary of Labor Robert Reich claims financial transaction taxes are simply sales taxes on Wall Street traders and won’t harm markets or cause capital to flee. Yet studies of FTTs in other countries show they harm Main Street and distort markets. Former …
By UCLA Professor Avanidhar Subrahmanyam and University of Alaska Professor Holly Bell Since IEX submitted an application last year to the SEC to become a public stock exchange, a big debate has erupted about a seemingly small time frame — 350 microseconds. IEX’s proposed exchange would implement an intentional delay of 350 microseconds to …
My latest on CNBC: Why the SEC should just say ‘no’ to IEX Read More »
Ill-considered regulation regarding algorithmic trading will adversely affect the ability of legitimate market participants to contribute to liquidity, price discovery, narrow spreads, and low trading costs. The CFTC shares with market participants a growing interest in algorithmic trading and its potential effects on the markets. Rather than working with market participants cooperatively, the Commission proposes …
Life is weird sometimes. I had a pretty great week last week. I got to go to Chicago early in the week to speak at a conference on high-frequency and algorithmic trading and meet a lot of interesting–and frighteningly smart–people. I always enjoy getting my nerd on with other academics and policy wonks especially when …
…and then one morning you wake up and you’re a reference on Wikipedia Read More »
What motivates countries to discourage HFT? “While there are several empirically demonstrated benefits of high-frequency trading, including improved liquidity and reduced transaction costs, the current arguments against HFT are largely qualitative in nature. With that in mind, what are the drivers behind global HFT regulation, and do they suggest a market failure attributable to HFT?” …
HFT Regulation Requires Attention to Motives and Consequences Read More »
Motivations, 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 …
My public interest comment on the CFTC’s Concept Release on Risk Controls and System Safeguards for Automated Trading Environments is available here
My article in American Banker is available here
“There are studies that indicate that economic growth slows when public and private debt exceeds 260% to 275% of GDP. The U.S. hit the 260% level in 2000.” A recent paper by Hoisington Investment Management Company (available here) does an excellent job describing why the Federal Reserve is, and will continue to be, unsuccessful in …
