Bank for International Settlements: High-Frequency Trading's Surprising Impact on Company Capital (Explained)

This episode delves into a new research paper from the Bank for International Settlements, exploring how the lightning speed of high-frequency trading (HFT) influences the cost of capital for companies. We uncover how HFT can paradoxically raise capital costs for some stocks by amplifying systematic risk, while simultaneously reducing it for others through improved liquidity. Discover the crucial implications of these complex findings for financial market regulation and real economic outcomes. This episode explains a real academic paper in plain English for a general audience. Source paper: high-frequency trading - Bank for International Settlements https://www.bis.org/publ/work1290.pdf Keywords: high-frequency trading, cost of capital, financial markets, market regulation, systematic risk, financial stability