Running the World's Markets: The Governance of Financial Infrastructure

The efficiency, safety, and soundness of financial markets depend on the operation of core infrastructure--exchanges, central counter-parties, and central securities depositories. How these institutions are governed critically affects their performance. Yet, despite their importance, there is little certainty, still less a global consensus, about their governance. Running the World's Markets examines how markets are, and should be, run.

Utilizing a wide variety of arguments and examples from throughout the world, the similarities and differences between exchanges, central counter-parties, and central securities depositories are identified and evaluated. Drawing on knowledge and experience from various disciplines, including business, economics, finance, law, politics, and regulation, a range of methodologies are employed to tackle different goals. Conceptual analysis is used to examine theoretical issues, survey evidence to describe key aspects of how market infrastructure institutions are governed and regulated globally, and case studies to detail the particular situations and decisions at specific institutions. The combination of these approaches provides a unique and rich foundation for evaluating the complex issues raised.

Running the World's Markets analyzes efficient forms of governance, how regulatory powers should be allocated, and whether regulatory intervention in governance is desirable. Guidelines are presented for identifying the optimal governance model for any market infrastructure institution within the context of its specific environment.


What is an Exchange? The Automation, Management and Regulation of Financial Markets


New technology is revolutionizing the nature and threatening the existence of traditional stock and futures exchanges. This book analyses how they are responding to developments in automation, what strategies they should adopt to survive and prosper in a competitive environment, and whether their actions both are, and should be, a matter of public concern. The development, operation and management of stock and futures exchanges is examined. Relevant law and regulation is interpreted and evaluated. Finally, some policy recommendations are presented. The book applies knowledge, experience and analytical techniques from the fields of business, economics, law and regulation.