High-frequency traders impose costs on others – BIS paper
Study of dark pools finds HFTs almost never provide liquidity, while raising the cost for all
High-frequency trading firms (HFTs) take advantage of “stale” prices to make nearly risk-free profits, while imposing costs on other market participants, research published by the Bank for International Settlements finds.
Sharks in the dark: quantifying HFT dark pool latency arbitrage uses regulatory data to assess the impact of “latency arbitrage” – in which firms race to respond to a price signal – on liquidity. The paper focuses on dark pools, private trading venues with no pre-trade
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@centralbanking.com or view our subscription options here: http://subscriptions.centralbanking.com/subscribe
You are currently unable to print this content. Please contact info@centralbanking.com to find out more.
You are currently unable to copy this content. Please contact info@centralbanking.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@centralbanking.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@centralbanking.com
More on FMI
More CCPs would not avert US Treasuries crisis – BIS study
However, economists say central clearing could still improve market functioning
AI risks ‘strikingly similar’ to financial ones – DNB official
Central banks entering new phase of risk management, says board member responsible for supervision
Previous CBDC research based on outdated assumptions – ECB paper
Authors say rejecting digital cash would have adverse unintended consequences
Ukraine moves to curtail capital flight
NBU says changes will support defence, business and “nuclear insurance pool”
Draghi report calls for step change in EU investment
Former ECB chief says bloc should revive securitisation and finish capital markets union to stay competitive
RBA examines central clearing for bond and repo markets
Central bank says recent developments mean there is a stronger case for CCPs
BoE’s high-value payment system hit by ‘global payments issue’
Settlement of some payments delayed after problem originating with Swift; ECB delays closure of Target systems
Banque de France and HKMA to conduct cross-border CBDC test
HKMA is the first non-European central bank to join the Eurosystem’s wholesale DLT settlement trials