Slide 17 of 26
Notes:
More importantly, the same thing is true of physical goods. The computer does not know whether the BUY instruction relates to a security or a tanker-load of oil. The computer does not know whether subject of the transaction is regulated by the FTC because it is a “commodity,” or by the SEC because it is a share of General Electric, or by the FTC because it is a jacket, or by the FDA because it is a drug.
On the programming level there is no difference between financial services of every kind and other commercial products and services of every kind. To put the matter in U.S. banking law terms, an analysis on the programming level indicates the core artificiality of the distinctions in the Glass-Steagall Act and suggests the extent of the difficulty in maintaining them. They essentially do not conform to the underlying reality.
A further example is the breakdown of the traditional securities trading mechanisms as a result of these commonalities. Traditional stock exchanges and securities trading mechanisms are experiencing a structure-altering level of competition from electronic communication networks (ECNs) and other alternative trading systems (ATS). In addition, traditional brokerage firms are being challenged fundamentally by low-cost online brokers. Finally, it is clear that there is no fundamental difference on the programming level between bank payment systems and securities settlement systems.
