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Abstract

The title of this Symposium originally was “Rethinking Financial and Securities Markets.” It is, of course, somewhat presumptuous for scholars to try to rethink financial markets per se. Markets, including financial markets, are driven primarily by supply and demand. But scholars can and should try to influence the future of financial markets by rethinking their fundamental aspects. This Symposium presents work from leading scholars in the fields of law, economics, finance, and accounting. I will try to frame the discussion from the perspectives of these four disciplines. First, however, we need to identify what it is about financial markets that is worth rethinking. I will focus on ways in which financial markets have been changing. They are increasingly decentralized and fragmented. They are increasingly direct sources of firm capital—a process called disintermediation. They are increasingly global. They are increasingly creating funding mismatches, as short-term securities are used to finance long-term capital needs. And they (as well as financial market products) are increasingly complex and obscure to market participants, even with full disclosure. I will refer to these “financial market changes” throughout my talk.