A Worldwide Revolution: Securities
Markets From 1990
Towards the end of the twentieth century the global securities market reached and probably surpassed the position it had occupied at the beginning. Securities markets had once again become essential components of national financial systems and provided a key element in the financial flows that redistributed savings around the world, bringing stability to the international monetary system. Nevertheless, this did not mean a return to the conditions prevailing before the First World War. The world that existed around 2000 was very different from that of a hundred years previously. Governments possessed much greater influence even though they had retreated from the excessive centralization, control, and ownership that had characterized much of the intervening period. Regulation at national level, supranational organizations, and intergovernment agencies and agreements conditioned much of what took place in financial markets whereas around 1900 the level of government intervention was almost minimal in comparison. Another major difference was the degree of integration made possible by technological change in communications and computing. Though the telegraph and the telephone had already transformed the global securities market by 1900, the speed and capacity available through electronic trading networks, at low cost, revolutionized both wholesale and retail operations by 2000. Finally, the enormous advances made in corporate organization and management allowed the creation of global financial businesses on a scale which had not existed previously. No longer was the global securities market just the product of transactions between national businesses and national markets. It now included internal transfers between components of the same company.
The operations of global banks and brokers and access to the same marketplace no matter where the physical location of the participant changed the whole nature of the global securities market. This death of distance was an entirely new feature with far reaching consequences. Informal networks became managed organizations with power to challenge governments in a way that markets never could. However, it would be a mistake to exaggerate