This weeks lecture consisted of international stock exchanges and stock market efficiency. New york,Tokyo and Japan are the three main players in the stock exchange because of the time difference, We get a 24 hour stock exchange. London is a world player and if theres mergers this can create MSW. In the news at the minute, There is speculation that there will be a German takeover of the New York stock exchange and if that happened there would be a massive ripple in the financial market.
The problem with the mergers is that it could lead to different rules and regulations, But the positive side is that more competition leads to stock trading being less profitable, So the answer is to get bigger and get rid of the competition to become a monopoly. More mergers may be on the way so they become more successful if they have the same idea to create MSW, 2 heads are better than one so to speak, It will create a group that will dominate european trading. Because of advances in global financial markets i.e, changes in technology it is easier to trade because more can take place now because of the speed of technology.
This has to be accessed and managed properly because of the risk factor, as this is the seed of destruction. So the question is- Is mergers of the stock market the way forward? = Yes if the risk is managed correctly and it increases MSW.
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