INTERNATIONAL LINKAGES: Financial markets and technology

Technology has facilitated increased cross-border participation in financial markets and a growing prevalence of cross-jurisdictional financial market infrastructure providers. This paper investigates the potential impact of these trends on the location of various financial markets and the financing of Australian businesses. The benefits of centralised markets seem clearly to outweigh any costs in both the foreign exchange and derivative markets. However, the outcome of this trade-off is less clear in the capital markets. An earlier version of this paper was presented to the 2014 Australian Centre for Financial Studies' Melbourne Money and Finance Conference.