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These are terrible reasons. Time to process the trade should be zero if systems are designed properly. If you need to borrow cash to trade you should do it firs

These are terrible reasons. Time to process the trade should be zero if systems are designed properly. If you need to borrow cash to trade you should do it first, etc. If some participants want to stay slow, bear more risk, require more capital, etc... let them. But the rest of the financial system shouldn't be held back because of them. Time for instantaneous settlement, across the board. This will never happen if we leave it to banks, exchanges, clearing houses and the rest (some of them even have a vested interest in it not happening). This is one of the clearest use cases for blockchains [1]. It answers the problem of how next gen financial infrastructure will get built, and frankly the savings and benefits to be had are astronimical. [1] These will probably be public blockchains, but it's possible a "proof of authority" real time settlement chain or similar operated by a consortium could work, too, as an interim step/for some cases

totalZero 6y ago
A San Francisco approach to a New York problem.
- barnabee 6y ago
  In the UK we do the tech and the finance in the same city. My observation is based on over a decade working on trading and settlement systems at multiple major international banks, exchanges. The infra is creaking at the sides, it is too expensive to fix individually. We're talking hundreds of millions, even billions, at every institution, that they internally decide, repeatedly, that they cannot spend. Every so often a bunch of them try and work out how to build an industry utility for faster, better settlement but can never get past the politics. So it won't change in a big way, not from the current vantage point. But the world is changing. More countries and industries getting into the financial system, changing retail demand, more complexity for small businesses working internationally, etc... so I don't think it ends with "it's too hard to properly fix this" so let's not. I am pretty convinced at this point that the world will fix it, as I've described, but from very different starting points to major New York and London institutions, and they'll drag the rest of the industry kicking and screaming along with them at some point... once there's money to be there in size, the big banks and funds will follow.

totalZero 6y ago

A San Francisco approach to a New York problem.

barnabee 6y ago
In the UK we do the tech and the finance in the same city. My observation is based on over a decade working on trading and settlement systems at multiple major international banks, exchanges. The infra is creaking at the sides, it is too expensive to fix individually. We're talking hundreds of millions, even billions, at every institution, that they internally decide, repeatedly, that they cannot spend. Every so often a bunch of them try and work out how to build an industry utility for faster, better settlement but can never get past the politics. So it won't change in a big way, not from the current vantage point. But the world is changing. More countries and industries getting into the financial system, changing retail demand, more complexity for small businesses working internationally, etc... so I don't think it ends with "it's too hard to properly fix this" so let's not. I am pretty convinced at this point that the world will fix it, as I've described, but from very different starting points to major New York and London institutions, and they'll drag the rest of the industry kicking and screaming along with them at some point... once there's money to be there in size, the big banks and funds will follow.