The future of capital markets in a digital economy
A speech by Greg Medcraft, Chairman, Australian Securities and Investments Commission, Distinguished speaker series, Carnegie Mellon University (Adelaide, Australia), 16 September 2015
Good afternoon, everyone. I would like to thank Dr Bolongaita for inviting me here. It is a privilege to speak with the faculty and students of Carnegie Mellon University.
This university has a long history of stimulating important conversations and exploring real solutions to the challenges facing our society. I am pleased and honoured to contribute to this tradition today.
I’d like to talk today about the future of capital markets, particularly the impact on those markets of rapid developments in digital technology – which I call ‘digital disruption’.
I will do so with two hats. The first is as Chairman of ASIC, the second is as Chair of the International Organization of Securities Commissions – or IOSCO.
By way of background, IOSCO brings together markets regulators from over 120 jurisdictions – which together represent over 90% of global capital markets by value.
It is the key reference point for financial services and markets regulation globally. Its role includes:
- identifying emerging global risks,
- developing guidance and standards where appropriate to deal with those risks
- supporting members in developing, supervising and enforcing the law in their jurisdictions.
Today I will talk specifically about three things:
- Firstly, I will outline some of the changes that digital disruption is bringing to existing business models.
- Secondly, I will talk about the potential that these developments have for capital markets as we know them, with particular reference to the emergence of blockchain technology.
And finally, I will outline how regulators might respond.
My main message today is that digital disruption has enormous potential to reconfigure and radically improve the efficiency of global capital markets.
I see this happening because digital disruption will give investors, and businesses looking for capital, more direct, more immediate and cheaper access to each other. And what this means, for us as regulators, is reconfiguring our toolkit around the end users of our markets – businesses and investors – and how they behave. Given the speed of change, we need to think about that toolkit now.
Before I expand on these ideas, let me first give you some background about ASIC, our priorities, the challenges we face and how we are meeting them.