| Sumario: | According to established stock markets, electronic exchanges could bring market fragmentation, but they may just be scared of the competition. The recent surge of innovation in electronic share-trading systems is forcing regulators to deal with a host of questions they would rather not have to. Technological change in itself is not the problem; rather, it is the regulated marketplaces that have tended to be slow and ineffectual in adopting new technology. In most industries, more competition has been welcomed, but in financial markets, there is a fear that new competitors will drain liquidity from traditional markets, dividing big pools of liquidity into smaller ones and making traders and investors worse off.
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