Cass contributes to new UK report on superfast trading
Professor Richard Payne co-authors chapter for government commissioned study
Cass finance professor Richard Payne has contributed to a new report commissioned by the British government on high-frequency trading.
The two-year study titled, The Future of Computer Trading in Financial Markets - An International Perspective, aims to shed light on the implications of technological advances which enable computer algorithms - rather than humans - to drive high-speed stock trades.
The report finds evidence to suggest that computer-based trading has had several beneficial effects on markets, including improved liquidity, lower transaction costs for retail and institutional traders and more efficient market prices.
However, it also says that in specific circumstances computer-based trading can lead to market instability and periodic illiquidity.
Professor Payne, who co-authored a chapter of the report on the implications of computer-based trading for market abuse, said: "The Foresight report provides important new evidence for policymakers on the effects of high-frequency trading on financial markets as well as on the efficacy of measures that might be adopted to limit the negative effects of computer-based trading."