Journal Detail

Journal 2 – The New Wave of Liquidity

July 2001

This issue looks at how new technologies have mitigated many of the frictions that exist within today’s global financial markets, and as a result enabled both individuals and institutions to release the value tied down within many of the assets they possess much more efficiently.

The theme of the second issue of the journal is ‘The New Wave of Liquidity’, which looks at how new technologies have mitigated many of the frictions that exist within today’s global financial markets, and as a result enabled both individuals and institutions to release the value tied down within many of the assets they possess much more efficiently. The implications of this value liberation has been to substantially increase global liquidity. The three sections of this issue cover how each constituent - the economy at large, institutions, and individuals - will be impacted by the new wave of liquidity.

The first section describes the significant contributions made by the technological revolution to the recent economic revival within the U.S. In addition, this section looks at how the Internet will impact the economic productivity of the U.S., and consequently the rest of the world.

In part two, researchers from the Office of the Comptroller of Currency and the World Bank assess how electronic commerce has impacted the kinds of services financial institutions offer their individual clients. They find that new technologies have made it possible for individuals based within developed economies to have significantly improved quality of access to their finances. This level of service is, however, not available within emerging markets, although steps have been taken to reduce this digital divide.

In the last section, a series of papers describe how providers of financial services can use new technologies to improve their offerings and the efficiency of their operations. In addition, some of the papers make recommendations on how asset management firms can improve their performance through better client utilization and superior investment management methodologies.

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