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| Author: | Kyle, A. S. |
| Title: | Improving the performance of the stock market. |
| Journal: | California Management Review
1988 : SUMMER, VOL. 30:4, p. 90-114 |
| Index terms: | STOCK MARKETS ECONOMIC PERFORMANCE |
| Language: | eng |
| Abstract: | Lessons of the "market break" of October 1987 are summarized and discussed. Improvements in the stock market mechanisms are suggested which would help prevent another "market break". Market makers and index arbitragers are declared to be only intermediaries between the patient and impatient traders who ultimately determine prices. Institutions for maintaining trust based upon accountability to customers in securities trading are scarce. Two sets of events are reviewed: a crash in which impatient sellers overwhelm patient buyers, and a panic in which solvency worries take traders out of the markets. Improvement proposals should address the proper role of market makers, the lack of accountability, the panic and crash. |
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