This book underscores the complexity of the equity markets, the challenges they face, and the fact that they are still a work in process. Three interacting forces drive market change: competition, technology change, and regulatory change. The markets have one major objective in particular to achieve: the delivery of accurate price discovery for both traders and the broader market. Are we getting it? Are competition, technology, and regulation acting together to improve market quality, or are they adding to the complexity of the markets and making accurate price discovery harder to achieve? The difficulty of addressing these issues and reaching a consensus regarding public policy is reflected in the diverse opinions expressed in this book. From an institutional perspective, the volume’s contributors highlight the interconnectedness of all aspects of the internal and external environment within which exchange organizations act. Equity Markets in Transition underscores how technological evolution and recent regulatory changes have influenced the business, and how these developments have opened new possibilities for exchange organizations and for equity markets as a whole, including such issues as the impact of equity markets on job creation. The book combines both a theoretical and a practical approach. Part I presents a theoretical overview of the international equity market business, including an overall description of the value chain of stock trading that includes deep dives on every decisive step. Part II contains contributions from various business specialists who have specific practical and academic knowledge of the different steps. Equity Markets in Transition represents a unique combination of theoretical and practical analysis that offers first-hand insights on all relevant interactions and interrelations among the various parts of the exchange business, with an emphasis on facilitating analysis of the status quo and of emerging trends regarding business models, regulation, and the development of the competitor, customer and investor sides.

The book, the first time, critically evaluates the evolution of both equity and securities markets in transition economies.

The structure and operations of the US equity markets have evolved dramatically in recent decades with the advent of major technology and regulatory changes. Nothing short of a groundbreaking shift has occurred in the securities industry as the transition has been made from predominantly manual, human intermediated trading to predominantly electronic trading. By many measures, commission, spreads and market impact costs have been dramatically reduced in recent years. But does that mean that market quality has improved? That is the key question addressed in this book, titled after the Baruch College Conference, “The Quality of Our Financial Markets: Taking Stock of Where We Stand.” Featuring contributions from a distinguished panel of practitioners, academicians, and regulators, this volume offers a penetrating and timely account of the most current issues in market quality, covering such topics as high-frequency trading; the Flash Crash of May 6th, 2010; dark pools; lit pools; fragmentation; disruptive and advanced technologies. And, very significantly, it takes a close look at the impact and influence of regulation. The Zicklin School of Business Financial Markets Series presents the insights emerging from a sequence of conferences hosted by the Zicklin School at Baruch College for industry professionals, regulators, and scholars. Much more than historical documents, the transcripts from the conferences are edited for clarity, perspective and context; material and comments from subsequent interviews with the panelists and speakers are integrated for a complete thematic presentation. Each book is focused on a well delineated topic, but all deliver broader insights into the quality and efficiency of the U.S. equity markets and the dynamic forces changing them.

This book addresses two different but related topics that can arise during the development of equity capital markets and which could possibly hinder their development: partial privatisation and shareholder rights. Both issues are developed in the context of transition economies in general and Russia in particular. Chapter 2 puts forward a theory of partial privatisation, i. e. a model that aims to explain why the state keeps some residual shares. Several recent surveys for Russia have shown that the state does often not actively use the voting rights of its residual shares. If this was true, partial privati sation could entrench management and hinder restructuring. It would also limit the supply of shares, which could lead to low liquidity. This would be likely to slow down the development of the equity capital market. However, the model in chapter 2 shows that it can be rational to hold back shares from sale in order to maximise privatisation receipts. Another issue which holds back the development of this market is the fact that shareholder rights can not be guaranteed by the state due to weak institutions. Chapter 3 contains an empirical examination of which firms honour shareholder rights and also provides a direct link between this problem and partial privatisation. Maybe surprisingly, some weak evidence is presented that shows that the residual state holding does not exert a negative influence with respect to the introduc tion of shareholder rights, but might even be a weak positive force.

In this paper we explore some of the informational problems that constrain the development of credit markets in transition economies. We characterize investment patterns under uncertainty and high costs of entry, when agents learn about the ultimate value of enterprises through production in a Bayesian way. Inefficiencies due to the lack of public information reduce the average return to capital. Under asymmetric information, credit would go to activities that can provide enough co-finance. Credit markets may fail to develop for a while if there is not enough individual wealth to complement credit. Once they operate, credit markets may magnify distortions in equity markets, such as those due to spontaneous privatization. An argument for the sequencing of capital market liberalization is provided.

Comprising 19 commissioned articles, this collection addresses the global issues of volatility in equity and foreign exchange markets and the regulatory scene in developed and emerging markets.

These papers provide a cutting-edge overview of general issues regarding world capital markets, experience in developing countries, and capital market regulation, which many economists believe could turn into the number one topic in international business and economics.

The collapse of the state-controlled economies of the former Eastern Bloc will certainly change the way the global economy operates. Bringing together scholars from a wide variety of theoretical perspectives, different nations and different empirical research traditions, this title examines the ongoing transition and the implications of market transitions for individual life chances, state economic policy and social stratification systems. The volume includes scholarship that focuses on both single nation and cross-national research, plus research contributions that compare state socialist/former state socialist political economies with conditions elsewhere in the world.

Looks at the process of transition from independent national financial markets to a more integrated, globalized market and the key factors that lie behind growth, change and competitive success.