HFT Regulation

An Analysis of Global HFT Regulation

<h2 class="p1"><a href="http://www.professorhollybell.com/wp-content/uploads/2014/05/ID-10068053.jpg"><img class="alignleft size-medium wp-image-2692" src="http://www.professorhollybell.com/wp-content/uploads/2014/05/ID-10068053-300x199.jpg" alt="HFT Regulation" width="300" height="199" /></a>Motivations, Market Failures, and Alternative Outcomes</h2> <p class="p1">"Recent market events like the “flash crash” of 2010, algorithmic failures at Knight Capital, and the <span style="font-size: 11.818181991577148px;">release of Michael Lewis’s book Flash Boys (2014)—with his claims that markets are “rigged”—have </span><span style="font-size: 11.818181991577148px;">heightened scrutiny of high-frequency trading (HFT) and increased demands for more aggressive </span><span style="font-size: 11.818181991577148px;">regulation. However, HFT has several empirically demonstrated benefits, and the current, largely </span><span style="font-size: 11.818181991577148px;">qualitative arguments against it call for careful scrutiny of proposed regulations.</span></p> <p class="p2"><span style="font-size: 11.818181991577148px;">In a new study for the Mercatus Center at George Mason University, Holly A. Bell and Harrison </span><span style="font-size: 11.818181991577148px;">Searles analyze the potential economic benefits of HFT and assess several proposed or adopted </span><span style="font-size: 11.818181991577148px;">regulatory schemes from around the world."</span></p> <p class="p2">The full study is available from the Mercatus Center by clicking <a title="An Analysis of Global HFT Regulation" href="http://mercatus.org/sites/default/files/Bell_GlobalHFTRegulation_v2.pdf" target="_blank">here</a></p> <p class="p2"><em>Holly A. Bell

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