TECHNOLOGY AND FINANCE - THE ELECTRONIC MARKETS

Change is afoot in the land of global finance, driven in large part by rapid technological advances. The convergence of computers, telecommu nications that link computers and related devices, and applications so ftware has enabled the birth of a whole new financial products and ser vices. Finance is now a 24-hour-a-day, seven-day-a-week, nearly instan taneous marketplace. The advantages are seen in lower unit costs, broa der financial access, and more rapid transaction times. Disadvantages also abound. The investment costs of keeping technologically up to dat e are huge. As a result, the number of bank mergers is increasing, and the financial industry job market is contracting. Rapid, often virtua l markets have created regulatory headaches around the globe. Both com mercial financial institutions and government central banks find it ha rder and harder to manage the pace of technological and market change. The implications for social change are many. For individual firms and for industry in general, the opportunities and tensions attributable to this change are beginning to be well defined. But, there is no clea r indication of how Ear or how fast change will affect society overall . The capacity of society to absorb major changes in monetary mechanis ms may, in fact, act as a brake on the uptake of technological change. (C) 1997 Elsevier Science Inc.