Should Securities Markets Be Transparent?
نویسندگان
چکیده
While efficient price discovery is crucial, there is another equally important attribute of markets that merits consideration, namely liquidity. Efficient prices, after all, are unimportant if one can transact only a 100-share lot at these prices. Liquidity was historically provided by dealers who buy or sell securities on demand. In the past, where communication links were poor and buyers and sellers had little information about current market prices, it made sense to rely on dealers who stood ready to buy or sell on demand by posting bid and offer quotes. In the modern world, advances in communications technology allow buyers and sellers to interact with one another at current prices in an electronic auction without the need for a physical exchange floor or for dealer intermediaries.
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