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- Title
Market Design--A Practitioner's Perspective.
- Authors
Reck, Martin
- Abstract
Financial markets have fundamentally changed with the application of information technology. Market development has changed accordingly. It has become a design process; it moved into the focus of market design. The objects of market design are market models, trading services, and trading systems--their analysis, description, and specification. Market design refers to and is guided by market microstructure with its market model schemes and classifications, market-model-related findings, and results on topics of market liquidity. Market design as an approach for market development is applied by market operators who as a business build and run trading systems. Xetra, a trading system, has been operated by Deutsche Börse since 1997 and is the leading trading venue for German equities and exchange-traded funds in Europe. Some key concepts and innovations of Xetra are shown and explained as example cases for market design in this article: how market model schemes, different measures of liquidity management, and modification and extension of the hybrid market model contributed to the success of Xetra over many years.
- Publication
Journal of Portfolio Management, 2022, Vol 48, Issue 6, p58
- ISSN
0095-4918
- Publication type
Academic Journal
- DOI
10.3905/jpm.2022.1.383