MFA Blog: ECB Report Notes the Benefits of High-Frequency Trading

According to an MFA blog post, a report published by the European Central Bank ("ECB") notes a number of benefits that high-frequency trading provides to markets, including the benefit of making markets more efficient and less volatile.

The report indicates that high-frequency trading has made the marketplace a "highly competitive environment." The report further raises the question as to whether there are in fact benefits from the old more highly regulated intermediation sector, e.g., requiring continuous liquidity supply, and limiting liquidity demand that outweighs lower innovation and monopolistic pricing typically associated with regulation.

See: MFA Blog Post; ECB Report: High-Frequency Trading and Price Discovery.