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"Worldwide capital markets still seek 'operational and informational efficiency'"

The latest issue of the Capco Institute’s "Journal of Financial Transformation" looks at the challenges still facing the financial services industry in its quest for market efficiency

London, 6 September 2005 – The financial services industry faces a number of challenges that continue to prevent it operating at the levels of efficiency attainable in other less regulated industries. These frictions range from legacy systems that prevent different divisions of the same financial institution from communicating effectively with one another to the large number of regulations and regulators monitoring these institutions, to the highly complex markets and instruments that they deal with.

Capco, the global financial services and technology solutions provider, is pleased to announce the publication of the 14th issue of the Capco Institute’s "Journal of Financial Transformation", entitled "Market Imperfections", which highlights some of these challenges and discusses ways in which a number of them can be met. The Journal is available online by registering at

Rob Heyvaert, Founder, Chairman and Chief Executive Officer, Capco, states: "Capital markets are nowhere near perfect in spite of the considerable advances being made particularly in technological trading, and the continuing good news on informational and operational efficiency. The Capco Institute’s latest Journal aims to offer some suggestions to overcoming the obstacles to efficiency as well as to provide a forum for debate on the desirability of market perfection."

Dr Shahin Shojai, Director of Research at Capco, and Editor of the "Journal of Financial Transformation," said, "There is no doubt that the financial services industry has taken great strides in improving the efficiency with which it operates. However, we are still a long way away from achieving what many in our industry would call efficient."

In addition to publishing the perspectives of Nobel Prize winners in Economics, the Journal will, from now on, include commentaries and interviews with Nobel Laureates from other disciplines. Rowan Gillies, International President of Médecins Sans Frontières, and recipient of the Nobel Peace Prize in 1999, has inaugurated this new addition to the Journal by highlighting the challenges his organization faces in providing adequate healthcare in the poorest corners of the world.

As well as Rowan Gillies, the Nobel Laureate section of the Journal features Professor Harry Markowitz, the inventor of portfolio investment theory, who responds to a number of questions on the efficiency of the world’s markets.
Contributions to the Journal cover the following main areas of discussion: institutional’, ‘market’ and 'regulation'. Other articles which feature in this issue of the Journal are:

• Electronic payment: The missing link in supply chain efficiency: Aliza Knox, Senior Vice President, Commercial Solutions, Visa International
• STP: Solutions are only half the story: Mark Snowdon, Head of Custody Sales, The Bank of New York
• Growing demand, growing volumes, the OTC derivatives market challenge: Andrew Dixon, Managing Principal, Capco; David Myers, Partner, Capco
• Achieving best execution in securities markets: Wayne H. Wagner, Chairman, Plexus Group Inc.
• The European residential property market: A series of structural anomolies – John Smullen, Greenwich Business School; Keith MacDonald, Partner, Capco
• Inefficient markets and the new finance: Lynn A. Stout, Professor of Law, UCLA School of Law; Principal Investigator, UCLA-Sloan Foundation Research Program on Business Organizations
• Market imperfections: Ramon P. DeGennaro, SunTrust Professor of Finance, The University of Tennessee, Knoxville, and Visiting Scholar, Research Department, Federal Reserve Bank of Atlanta
• Securities transaction taxes and financial markets: Karl Habermeier, Advisor and Technical Assistance Area Chief (Asia-Pacific), Monetary and Financial Systems Department, IMF; Andrei A. Kirilenko, Economist, International Capital Markets Department, IMF
• Sarbanes-Oxley: Corporate transparency or cost trap? Robert L. Formaini, Senior Economist and Public Policy Advisor, Research Department, Federal Reserve Bank of Dallas; Thomas F. Siems, Senior Economist and Policy Advisor, Research Department, Federal Reserve Bank of Dallas
• Reforming financial supervision institutions: An international comparison: Donato Masciandaro, Full Professor of Monetary Economics, Paolo Baffi Centre, Bocconi University, and Department of Economics, Mathematics and Statistics, University of Lecce