Chart 5 Estimated proportion of PTF activity in  Chart 6 Yearly average bid-ask spreads for  total US equity trading  FTSE 100 constituents Per cent  70 Bid-ask spreads for FTSE 100 constituents  60  Basis points  140  50  120  40  100  30  80  20  60 40  10  20  0 05 06 07 08 09 10 11 12 13 14 15 16 Sources: Tabb Group, reproduced from Credit Suisse – ‘We  0 95  00  05  10  15  Source: Thomson Reuters  are all High Frequency Traders Now’  11  All speeches are available online at www.bankofengland.co.uk/speeches  11  Chart 7 Latency on the LSE and number of US  Chart 8 Share of trading across venues in UK  consolidated tape quote updates  equity markets  Exchange (network) latency on LSE (lhs) Number quote updates per million Quote changes (thousands) shares traded (rhs)  Microseconds  Per cent of volume traded  100  1000000  30  80  100000  25  60  10000  20 15  100  10  10  5  20  high degree of price and counterparty transparency  LSE  0  08 1  less transparency around price and counterparty  Other lit exchanges  40 1000  more transparency around counterparty, less transparency around price  Off-book trading  09  10  11  12  13  14  15  16  17  0 00  02  04  06  08  10  12  14  16  Source: Brogaard (2013), LSE Group, Credit Suisse Research  Source: Fidessa  – ‘We’re All High Frequency Traders Now’  Chart 9 Share of trading across venues in US  Chart 10 Average trade sizes in selected  spot FX markets  equity , FX  (a)  (b)  and corporate bond markets  (c)  Per cent  100 90  Electronic Trading Systems  80  Equity FX Corporate bonds  70  Index (max=1)  1.0  60  Electronic Brokering Systems (Primarily Reuters/EBS)  50  0.9 0.8 0.7  40  0.6 Customer direct  30  0.5  20  0.4 Inter-dealer direct  10  0.3  Voice  0.2  0 04  05  06  07  08  09  10  11  12  13  14  0.1  15  0.0  03  Source: US Foreign Exchange Commission  05  07  09  11  13  15  Sources: US Foreign Exchange Committee, World Federation of Exchanges, FCA, Mizrach (2017) and Bank calculations (a) Trade sizes on London Stock Exchange (LSE) (b) Based on US Foreign Exchange Committee survey of US-based participants in FX spot markets (c) UK and US corporate bond markets  12  All speeches are available online at www.bankofengland.co.uk/speeches  12  Chart 11 Deviation from NAV in equity and fixed income ETFs  (a)  Equity Fixed income  Percentage points  0.3 0.2 0.1 0.0  -0.1 -0.2  -0.3 24 June 2013  24 August 2015  -0.4 -0.5  Jan. 2013  Jul.

(2007) Committee on Global Financial System’s “Report on Financial Stability and Local Currency Bond Markets”  10  BIS Review 98/2008  Borio, C., C. Furfine, and P. Lowe (2001), “Procyclicality of the Financial System and Financial Stability: Issues and Policy Options”, BIS Papers No. 1, March 2001. Calvo, G. and C. Reinhart (1999), “Capital Flow Reversals, the Exchange Rate Debate, and Dollarization”, Finance and Development, Vol. 36 (September), pp. 13-15. Cecchetti, S., A. Flores-Lagunes, and S. Krause (2006), “Financial Development, Consumption Smoothing, and the Reduced Volatility of Real Growth,” AEA 2007 Conference Papers. Ghosh, S. (2006) “East Asian Finance: The Road to Robust Markets” World Bank Conference Edition, Conference on “ East Asian Financial Markets: The Next Frontiers” June 2006, Hong Kong. International Monetary Fund (2005), Independent Evaluation Report of The IMF’s Approach to Capital Account Liberalization, Washington D.C. ______, (2004), World Economic Outlook, April 2004, Washington D.C. OECD (2007), Going for Growth 2007, OECD, Paris. Kose, M., E. Prasad, and M. Terrones (2006), “How do trade and financial integration affect the relationship between growth and volatility?” Journal of International Economics, Vol. 69 pp. 176-202. ______, (2005), “Growth and Volatility in an Era of Globalization”, IMF Staff Papers, vol:52, 31-63. Kose, M., E. Prasad, K. Rogoff , and S. Wei (2006), “Financial Globalization: A Reappraisal”, IMF Working Paper 06/189, Washington D.C. Larrain, B. (2004), “Financial Development, Financial Constraints, and the Volatility of Industrial Output”, Federal Reserve Bank of Boston Public Policy Discussion Papers 04-06.