Revamping the US equities market
The dynamics of the US equities market are such that the old system cannot last much longer without fundamental change. Internet trading, the recent appearance of electronic commissions networks, forthcoming shorter settlement times and decimalization of stock quotes are all turning the screw. Antony Currie reports.
It's the most visible market and one of the most talked about. But the US equities market also is one of the most inefficient in the developed world. What makes it so fascinating is that this inefficiency is often combined with innovation and the combination has left the market susceptible to transformation by the internet.
The explosive growth in the use of the internet in the US for general retail services as well as for on-line retail equity trading would suggest that the US is yet again leading the development in the use of technology. A much larger proportion of the US public has access to a computer and cheap internet services than in other countries. Consumers are more used to TV shopping, making the leap to internet shopping relatively painless; and retail finance on the internet has been pushed along by the vibrant equity culture of the US, guided to a great degree by the need for individuals to take responsibility for their own pensions.