Tech revolution to transform swap trading relationship

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tech revolution to transform swap trading relationship

The CFTC's swaps rules stifle technological innovation. The CFTC's response to the digital transformation of markets is AT is, at heart, a 20th century analog response to the 21st century digital revolution in trading markets. Its broad . and antagonizes its traditional relationship with market participants. Describe how the Fourth Industrial Revolution is transforming businesses. If those 10 technologies are the cause, then this module explains the effect. focused solely on selling products, to a relationship model, built around selling services and creating Change your car needs in the app, and Audi swaps it out for you. Industrial and Corporate Change, Volume 13, Number 2, pp. – analyzes one of the key trends of the quantitative revolution, the rise of electronic markets, arguing that electronic trading has altered the relationship between market .. Derivatives such as swaps,7 options8 and other financial instruments play.

Hand to hand markets became a feature of town life, and were regulated by town authorities.

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Western Europe established a complex and expansive trade network with cargo ships being the main workhorse for the movement of goods, Cogs and Hulks are two examples of such cargo ships.

The English port city of Bristol traded with peoples from what is modern day Iceland, all along the western coast of France, and down to what is now Spain. During the Middle Ages, Central Asia was the economic center of the world. They were the main caravan merchants of Central Asia.

tech revolution to transform swap trading relationship

From the 8th to the 11th century, the Vikings and Varangians traded as they sailed from and to Scandinavia. Vikings sailed to Western Europe, while Varangians to Russia. The Hanseatic League was an alliance of trading cities that maintained a trade monopoly over most of Northern Europe and the Balticbetween the 13th and 17th centuries. Prior to this, the flow of spice into Europe from India was controlled by Islamic powers, especially Egypt. The spice trade was of major economic importance and helped spur the Age of Discovery in Europe.

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Spices brought to Europe from the Eastern world were some of the most valuable commodities for their weight, sometimes rivaling gold. In the 16th century, the Seventeen Provinces were the centre of free trade, imposing no exchange controlsand advocating the free movement of goods.

tech revolution to transform swap trading relationship

Trade in the East Indies was dominated by Portugal in the 16th century, the Dutch Republic in the 17th century, and the British in the 18th century. Danzig in the 17th century, a port of the Hanseatic League. It criticised Mercantilismand argued that economic specialisation could benefit nations just as much as firms. Since the division of labour was restricted by the size of the market, he said that countries having access to larger markets would be able to divide labour more efficiently and thereby become more productive.

Smith said that he considered all rationalisations of import and export controls "dupery", which hurt the trading nation as a whole for the benefit of specific industries. Inthe Dutch East India Companyformerly the world's largest company, became bankruptpartly due to the rise of competitive free trade. In Principles of Political Economy and Taxation Ricardo advanced the doctrine still considered the most counterintuitive in economics: We have seen examples in the news of companies that have automated labor-intensive tasks and reduced their workforce as a result.

The Industrial Revolution of the s brought forth new technologies and different ways of working. Many skilled workers found themselves replaced by machines. While there were certainly displacements during this shift, the situation created an opportunity for education, previously not available for agricultural workers living in rural areas, and prompted the adoption of a whole new skill set needed to handle the then-modern machinery.

tech revolution to transform swap trading relationship

We certainly will face our own set of labour-force consequences as this Digital Revolution progresses. But, if history is to be our guide, business leaders must consider what skill sets will be most favourable, and then help their employees develop those proficiencies. Supercharged human beings and a more human leadership Technology democratises human capabilities — physical and intellectual.

We might be able to hand over labor-intensive or highly analytical tasks to machines and robots. We know, of course, that humanity eventually adapted to using steam power and electricity, and chances are we will do so again with the digital revolution. The answer lies not in denial but in devising smart policies that maximize the benefits of the new technology while minimizing the inevitable short-term disruptions.

The key is to focus on policies that respond to the organizational changes driven by the digital revolution. Electrification of US industry in the early 20th century benefited from a flexible educational system that gave people entering the labor force the skills needed to switch from farm work as well as training opportunities for existing workers to develop new skills.

More generally, future jobs will probably emphasize human empathy and originality: One clear difference between the digital revolution and the steam and electricity revolutions is the speed at which the technology is being diffused across countries.

While Germany and the United Kingdom followed the US take-up of electricity relatively quickly, the pace of diffusion across the globe was relatively slow. By contrast, the workhorses of the digital revolution—computers, the Internet, and artificial intelligence backed by electrical power and big data—are widely available. Indeed, it is striking that less-developed countries are leading technology in many areas, such as mobile payments Kenyadigital land registration Indiaand e-commerce China.

This means tremendous opportunities for trial and error to find better policies, but also the risk of a competitive race to the bottom across countries. While the digital revolution is global, the pace of adaptation and policy reactions will—rightly or wrongly—be largely national or regional, reflecting different economic structures and social preferences.

The revolution will clearly affect economies that are financial hubs, such as Singapore and Hong Kong SAR, differently than, for example, specialized oil producers such as Kuwait, Qatar, and Saudi Arabia. Equally, the response to automated production technologies will reflect possibly different societal views on employment protection.

Where preferences diverge, international cooperation will likely involve swapping experiences of which policies work best. Similar considerations apply to the policy response to rising inequality, which will probably continue to accompany the gradual discovery of the best way to organize firms around the new technology.

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Inequality rises with the widening of the gap in efficiency and market value between firms with new business models and those that have not reorganized. These gaps close only once old processes have been largely replaced. Education and competition policy will also need to be adapted. Schools and universities should provide coming generations with the skills they need to work in the emerging economy. But societies also will need to put a premium on retraining workers whose skills have been degraded.

Similarly, the reorganization of production puts new strains on competition policy to ensure that new techniques do not become the province of a few firms that come first in a winner-take-all lottery. In a sign that this is what is already happening, Oxfam International recently reported that eight individuals held more assets than the poorest 3.

The railroad monopolies of the 19th century required trust busting. But competition policy is more difficult when future competitors are less likely to emerge from large existing firms than from small companies with innovative approaches that have the capacity for rapid growth. How can we ensure that the next Google or Facebook is not gobbled up by established firms?

Avoiding a race to the bottom Given the global reach of digital technology, and the risk of a race to the bottom, there is a need for policy cooperation similar to that of global financial markets and sea and air traffic.

tech revolution to transform swap trading relationship

In the digital arena, such cooperation could include regulating the treatment of personal data, which is hard to oversee in a country-specific way, given the international nature of the Internet, as well as intangible assets, whose somewhat amorphous nature and location can complicate the taxation of digital companies.