The Ethics of Financial Market Making and Its Implications for High-Frequency Trading
| Autor: | Andrea Roncella, Ignacio Ferrero |
|---|---|
| Rok vydání: | 2021 |
| Předmět: |
Economics and Econometrics
Virtue ethics 050208 finance 05 social sciences Financial market General Business Management and Accounting Aristotle Market economy Purpose Arts and Humanities (miscellaneous) 0502 economics and business Natural (music) Market making High-frequency trading Business Business and International Management Chrematistics Business ethics Real economy Law 050203 business & management Financial sector Quality of Life Research |
| Zdroj: | Journal of Business Ethics. 181:139-151 |
| ISSN: | 1573-0697 0167-4544 |
| DOI: | 10.1007/s10551-021-04901-5 |
| Popis: | During the last 20 years, the financial sector has undergone an unprecedented transformation due to new regulations and the implementation of several technological advancements. The combination of regulation and technology has brought about new financial processes that have fundamentally changed how financial market making is done. This paper studies the ethics of financial market making and its implications for one of the most controversial financial innovations of modern times, namely high-frequency trading (HFT). We claim that the Aristotelian distinction between natural chrematistics, which is aimed at serving the real economy, and unnatural chrematistics, whose ultimate purpose is wealth accumulation, can be a useful criterion to assess the ethics of financial market making and the goodness of an innovation as HFT, and how it can serve the common good of society. This approach can be defined as ‘purpose oriented’ or ‘purpose fulfillment’. |
| Databáze: | OpenAIRE |
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