The financial crisis has made regulators wary of innovation. So far, much of their attention has focused on bank capital and securitisation, but they could now turn to the mechanics of electronic trading.
The changes in this area have been truly breathtaking. This was brought home to me by Thomson Reuters in the UK, which tells me that in 2000 it was following 5000 trading changes per second. This has increased to 550,000 changes per second today, and the exchanges expect it to top 1 million by the end of the year.
