Logica Funds’ Mike Green explains why he and most of the smartest people in finance are in the business of exploiting and profiting from deficiencies of current markets, rather than fixing them. Mike explains why incentives don’t favor fixing what’s broken, and what we need to do to change the system and enable migration to a new generation of SmarterMarkets™.
What to listen for:
— A smart contracts and ledger-based systems can improve transparency within the financial system, but the systems that are in place currently do not benefit from this transparency, creating a headwind for innovation in the technological infrastructure of financial markets.
— The lower cost of capital combined with a “social contract” or acceptance of risk taking is rewarded by the system and becomes the “bug” in adopting new technologies that keep market participants accountable.
— There is a cost associated with transparency, and until we accept this and are willing to pay for this collectively, we will find it difficult to build smarter financial markets to benefit society as a whole.