In this, the third paper in the Economists’ Hubris series, we highlight the shortcomings of academic thought in developing models that can be used by financial institutions to institute effective enterprise-wide risk management systems and policies. We find that pretty much all of the models...

In recent years, a large number of IPOs of public exchanges have been announced. These were mainly in response to growing pressure from the institutional investor community and intense competition from Alternative Trading Systems, such as ECNs. When these announcements were initially made, most...

Over the past decade, European exchanges have undertaken enormous reforms in their trading platforms and internal governance. Automation of trading combined with the internationalization of the major trading institutions has significantly intensified pressures for the consolidation of exchanges...

In this paper, we have highlighted the potential implications of a move in the U.S. to T+1 on European financial institutions. We explain that while many European institutions feel that they are sheltered from this move, those that undertake trading activities in the U.S. will find that they...

Open-economy macroeconomists regularly invoke the policy trilemma that states that governments cannot simultaneously maintain an open capital account, a fixed exchange rate, and a domestically-oriented monetary policy. My thesis is that jurisdictions with substantial offshore activities find...

This paper makes a study of payment systems in the countries of the enlargement of the European Union for the period 1996-2003 and its comparison with the members of the European and Monetary Union. The general tendency is of a movement from cash to alternative instruments of payment. However,...

The relationship between financial development and growth has been the subject of intense scrutiny. Economists debate whether finance causes growth [Hicks (1969), Schumpeter (1934)], or whether it is growth that triggers the development of financial markets [Robinson (1952)]. This paper proposes...

In this opinion piece, Dr. Anthony Kirby provides a snapshot view of the current business-to-business (B2B) landscape. He outlines how first-mover advantage has become first-prover achievement and explains why so many B2B exchanges are diversifying their range of services to build customer and...

The success of online stockbrokers has led many to believe that almost all aspects of the financial services industry can be disintermediated. I propose that those who make such predictions overlook the heterogeneity of this industry, and suggests that the fixed income market already possesses...

In today’s highly competitive environment, financial institutions will be hard-pressed to fund capital investments, system upgrades, new projects, state-of-the art infrastructures, and ultimately new products and services. They will, however, be expected to grow their businesses in the double...