The Shock of the New
The Internet is threatening to sweep away established market structures. It promises to change forever the way companies raise capital, the way investment banks work and how capital markets operate.
The financial industry has learned to respect the power -
and the destructive force - of the Internet. After all, there
are few industries as vulnerable to this technology as finance,
which for centuries has thrived on the inefficiencies created
by limited knowledge and access to markets. As new
Internet-based technologies become more pervasive, eliminating
inefficiencies and spreading information, vast sectors of the
financial industry around the world are being reshaped in
unpredictable ways. One lesson most observers of financial
markets in Latin America and elsewhere have learned is that the
rate of change is accelerating. Internet banking, invented
barely a few years ago, is now old hat even though banks are
still struggling to to adapt. Now, the Internet's primal energy
is being unleashed on the capital markets where it is beginning
to democratize access to capital and information and is already
changing the way securities are sold,...
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