Tuesday, March 15, 2016

The death and rebirth of the stock exchange - FT.com



Good popular media article on the rapidly changing role of stock exchanges

March 9, 2016 5:58 pm, The death and rebirth of the stock exchange, John Gapper, The Financial Times.

1. " ... The best days of being a stock exchange are in the past, when they were near-monopolies owned by market-making members and could easily make money. ...",
2. “... The core business of matching buyers and sellers is not very profitable and does not have great prospects.” Being a stock exchange was fine while entry barriers were high and they could shield themselves from competition....",
3. "... If stock exchanges are so weak, why are the companies that own them so resilient? The answer is simple: [they are] not really [a] stock exchange[s] any more.".

However: "Networks remain powerful — exchanging contracts through a hub rather making a multitude of bilateral deals creates economies of scale." - until this is challenged.

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