The Future of Computer Trading in Financial Markets
Andy Haldane, Professor Sir John Beddington, Mark Hoban MP and Dame Clara Furse introduce the project
Advances in technology continue to transform how our financial markets operate. The volume of financial products traded through computer automated trading taking place at high speed and with little human involvement has increased dramatically in the past few years.
For example, today, over one third of United Kingdom equity trading volume is generated through high frequency automated computer trading while in the US this figure is closer to three-quarters.
This Foresight project, sponsored by Her Majesty’s Treasury, is led by the Government Office for Science under the direction of the Government’s Chief Scientific Adviser, Professor Sir John Beddington. It involves leading experts in this field and will explore how computer generated trading in financial markets might evolve in the next ten years or more, and how this will affect:
- Financial stability;
- Integrity of financial markets including price information and liquidity;
- Competition;
- Market efficiency for allocating capital;
- Transaction costs on access to finance; and
- Future role and location of capital markets.
It will also assess options for addressing the key challenges ahead, and consider how the opportunities offered by advancements in computer technologies could be capitalised upon by the financial sector.
A High-Level Stakeholder Group, comprised of senior individuals from relevant institutions, provides strategic oversight for the project and advises on the key issues that should be addressed and how best to achieve action. Chaired by the Financial Secretary to the Treasury, Mark Hoban MP, it will meet four times over the project’s life.
The aim of this project is to make a significant contribution to the efficiency, integrity and resilience of financial markets, by identifying options for policy makers in the UK and internationally.
