OTC and exchanges: convergence deferred

摘要

Five years ago, the promise of commoditization and real-time processing created an expectation of a renaissance in listed product development. Alas, only a handful of products were developed, and they were underwhelming. But the expected convergence of OTC and exchange markets is gearing up now.rnRichard Olsen and his partner Michael Stumm built the Oanda trading platform in part to show it was doable, and in part because they truly seem to believe that if you get more people participating in open, transparent and liquid markets, you'll end up with the kind of fair and stable financial system that markets are supposed to deliver.rnContrast that with the over-the-counter (OTC) world, where a few well-educated, but not particularly diverse, minds are determining the prices on which trillions of dollars worth of global instruments are based.rnA cynic would blame the top-tier banks that run everything and keep the markets closed and clunky to bloat the bid-offer spreads that generate their profits.