The authors take a European perspective to challenge the traditional way that financial markets have operated in the United States and elsewhere. They point out, correctly I think, that the revolution is here. Fully automated markets now do the bulk of the worldwide futures trading. For example the Chicago Board of Trade was overtaken in futures volume by the fully automated German-Swiss EUREX in Frankfurt in 1998. London was charging from behind to take a big piece of the automated futures business as well. Automated trading experiments are going on in a number of other places, as well.
The vision the authors have is captured by a quote from Ludwig von Mises: "Economic history is the story of the gradual extension of the economic community beyond its original limits of the single household to embrace the nation and the world."
This vision is essentially of convergence into one global market, with one clearinghouse, and one regulator to do everything. The need to get costs down will require that convergence as the ultimate solution. How imminent this vision is has to be a guess (the authors convey the vision in the form of a dream), but the stories in the book show how often the complacent, traditional view has been wrong. The authors are good at pointing out the speed bumps that will delay progress, and outline good ideas for better and faster implementation.
But they are definitely tolling the bell in the near future for face-to-face selling. "In the future there will only be electronic traders." They also see a rise of small traders, small banks (doing direct placements of IPOs over the Internet with traders without underwriting syndicates), and greatly squeezed paychecks for traditional investment banking and trading activities.
I found the book to be consistent with my own vision. I was still left with the question of why the transition has not been a faster one. Financial markets should be converging at a much faster rate, if one looks only at the technology and the use of the Internet. Which aspects of human stalls are the worst delayers? Probably the tradition and bureaucratic stalls, because the existing markets and regulators are very slow to see new opportunity. Consider how recently fixed trading commissions disappeared. Those should have been gone in the Roaring Twenties.
If you want good detailed information on the state of the electronic market revolution, this book is essential reading. If you own a seat on an exchange, your pocketbook requires immediate attention.
There is an excellent section on how to prepare for the transition, and another one on the dangers to be cautious of.
Good look in building your wealth faster through more efficient markets!
I recommend this book to anyone interested in an overview of the recent history of the futures, equity and FX markets and a plausible view where the markets are heading.
I would also recommend Capital Markets Revolution to industry insiders who are well aware of the events and ideas discussed, as they can benefit from the framework and view of the future into which current events are placed.