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Paul Krugman in the NY Times writes that high frequency trading serves no social purpose other than to offer one person (or one bank) a profit.
"Just to be clear: financial speculation can serve a useful purpose. It's good, for example, that futures markets provide an incentive to stockpile heating oil before the weather gets cold and stockpile gasoline ahead of the summer driving season.
But speculation based on information not available to the public at large is a very different matter. As the U.C.L.A. economist Jack Hirshleifer showed back in 1971, such speculation often combines "private profitability" with "social uselessness." "
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Naina Rajgopalan Content Head at Freo
01 October
Carlo R.W. De Meijer The Meyer Financial Services Advisory (MIFS) at MIFSA
30 September
Alex Malyshev CEO, Co-founder at SDK.finance, FinTech software provider
Anurag Mohapatra Director of Fraud Strategy and Marketing at NICE Actimize
26 September
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