Darkness by design
the hidden power in global capital markets
- ISBN: 9780691216867
- Editorial: Princeton University Press
- Fecha de la edición: 2021
- Lugar de la edición: Princeton. Estados Unidos de Norteamérica
- Encuadernación: Rústica
- Medidas: 23 cm
- Nº Pág.: 248
- Idiomas: Inglés
Capital markets have undergone a dramatic transformation in the past two decades. Algorithmic high-speed supercomputing has replaced traditional floor trading and human market makers, while centralized exchanges that once ensured fairness and transparency have fragmented into a dizzying array of competing exchanges and trading platforms. Darkness by Design exposes the unseen perils of market fragmentation and “dark” markets, shedding critical light on how the redistribution of power and influence has created new winners and losers in capital markets. Essential reading for anyone with money in the stock market, this compelling book challenges the conventional view of markets and reveals the troubling implications of unchecked market power for the health of the global economy and society as a whole.
1 Introduction 1
A Deeply Puzzling Market Transformation 7
Power Politics and Market Governance 13
2 The Puzzling Transformation of Capital
Market Structure: From Gradual Concentration
to Sudden Fragmentation 23
The Evolution of the Market Organization and Its
Body Politic 24
The Transformation of Power Relationships
among Members 30
The Impact of Power Asymmetry 43
Implications 49
Appendix 51
3 Good Governance in Centralized Markets:
The Old NYSE 55
The Market Makers: Functions and Obligations 59
Market Surveillance 63
Rule Enforcement 72
Market Performance and Quality 76
Moving into the Twenty-First Century 89
4 Stratification in Modern Trading:
The Haves and Have-Nots 93
Speed 94
Globalization, Financial Innovation,
and Stratification 99
5 Bad Governance in Fragmented Markets 107
Weakened Market-Making Obligations 111
Information Asymmetry: Trading Data 114
Information Asymmetry: Market Microstructure 120
Darkness 125
Failing Market Surveillance 137
Implications 146
Appendix 148
6 Conclusion: The Way Forward 155
Market Transparency 156
Leveling the Playing Field 162
Proper Accountability for Market Disruption
and Bad Governance 164
Consolidation 165
Acknowledgments 171
Appendix: Market Governance: A Theoretical
Background Note 175
A Political Organization Approach in Relation
to Other Theories 175
Behavioral Assumption: Opportunism 181
Glossary 185
Notes 191
Bibliography 225
Index 24
