| > I have a finance background and previously worked for UBS and in retail and wholesale stockbroking. I fully understand the role of, say, market makers in the financial system (ie providing liquidity). > I hear those same arguments being used for HFT but honestly they don't really stack up (IMHO). <snip> It must be a challenge and I'm sure you can make a lot of money, which is fine, but it doesn't really contribute anything to the financial system. These two statements stand in direct contrast. If you understand the role of market makers then you should understand that the most popular HFT strategy is to be an electronic market maker. It's about competition for liquidity provision which tightens spreads which reduce the cost of trading for everyone. > 2. Not allowing investment banks to fail ("too big to fail" like Merrill Lynch). Bailouts of investment banks could reasonably be described as welfare for investment bankers; This would have caused the collapse of the global economy. Google would have suffered mightily from the following depression. Companies like ML might "deserve" to be punished and that process is now working it's way through the courts, but that bailout cost a lot less than 25% unemployment. > 3. Allowing banks to take positions as well as operate as market makers. There really should be strict separation here; By it's very definition, a market maker must take proprietary positions. > 5. Strict regulation on commodities market to separate speculators from hedgers. Driving up food prices causing untold misery even death should result in criminal liability for the organization and key personnel. Hyperbole. There's never been any evidence that speculation on commodities is "driving up food prices" let alone causing "misery event death". |