Has Financial Innovation Hurt or Helped Market Integrity?
Innovation has been a mixed bag for investors, according to an expert panel convened at the 65th CFA Institute Annual Conference in Chicago. While markets have become more efficient in many respects, with trading intermediaries whittled down and automated, threats to market integrity remain, including a reliance on leverage to squeeze profit margins from new banking business models and continued opacity in the darker shadows of the marketplace.
Francesco Guerrera of the Wall Street Journal moderated the panel, which included Bill Hambrecht, CEO of W.R. Hambrecht and Co; Duncan Niederauer, CEO of NYSE/Euronext; and Harold Bradley, chief investment officer of the Ewing Marion Kaufmann Foundation. Taken together, the panel represented perspectives of the triumvirate of sell side, buy side, and exchanges that make the capital markets work.