Technology and global financial markets: a marriage made in heaven or a witches' brew.

Abstract

Technology, in relation to financial markets, seems the veri-table double-edged sword. While facilitating the emer-gence of global financial markets, has it simultaneously rendered global financial systems more fragile and vulnerable? While it is the great equaliser and enabler, bringing real time in- formation to all at the speed of light, has this led to more educated choices or just added to the information overload? Has it engen-dered a false sense of confidence in valuation and risk manage- ment models? Can it help regulators, who seem habitually to be caught napping, do their jobs better? Will it render traditional intermediaries obsolete? Open capital markets and cross border capital flows have tremendous benefits for all the participants in the system but what kind of policy stands can governments adopt to retain the benefits of this open system while minimising the inherent dangers in times of crisis? Are we heading towards a global supranational regulatory authority and global currency?