If there happens to be a gap and an opportunity for
free profit (i mean converting currency A to currency B then to currency C and back to currency A, pay for all the transaction fees and still make some profit) such an opportunity will be quickly closed off by tradebots and FC
market will be
in equilibrium again instantly.
In short, while I believe the private equilibrium is generally quite responsible, regulators can not afford to be Panglossian about it - after all it was this private equilibrium that recently generated the illegal practice of late trading in some mutual funds, where preferred customers got to trade after the markets had closed, and it was this private equilibrium that caused a number of ostensibly safe money market funds in the early 1990s to take on excessive hidden risk that caused them to «break the buck» - in effect declare losses on what is supposed to be a risk free asse
In short, while I believe the private
equilibrium is generally quite responsible, regulators can not afford to be Panglossian about it - after all it was this private
equilibrium that recently generated the illegal practice of late trading
in some mutual funds, where preferred customers got to trade after the markets had closed, and it was this private equilibrium that caused a number of ostensibly safe money market funds in the early 1990s to take on excessive hidden risk that caused them to «break the buck» - in effect declare losses on what is supposed to be a risk free asse
in some mutual funds, where preferred customers got to trade after the
markets had closed, and it was this private
equilibrium that caused a number of ostensibly safe money
market funds
in the early 1990s to take on excessive hidden risk that caused them to «break the buck» - in effect declare losses on what is supposed to be a risk free asse
in the early 1990s to take on excessive hidden risk that caused them to «break the buck» -
in effect declare losses on what is supposed to be a risk free asse
in effect declare losses on what is supposed to be a risk
free asset.