multi - dealer systems. all speeches are available online at www. bankofengland. co. uk / news / speeches chart 4 : multi - dealer fx platforms – buyside market share source : euromoney fx surveys. some implications of fragmentation : the good, the bad and the ugly is fragmentation here for good? some suspect it will eventually hit the buffers, as the declining marginal benefits of ever - greater product diversity, and the growing cost of navigating it, become more evident. but others argue that it could accelerate further, as technology costs continue to fall, helping market users seek out more obscure venues where they might have an edge. 5 whatever happens, for today ’ s market participants, fragmentation is a fact. and that means – just like lola – they can experience a markedly broad range of outcomes. that has important implications for all three of the characteristics – informational efficiency, resilience and fairness – i talked about a moment ago. central banks are watching those issues closely. 6 but today i want to focus on the effectiveness of the fx market in delivering the services needed by its users – using three storylines of my own. our first fictional fx market user has never had it so good. with the resources and knowledge to connect to dozens of competing platforms and liquidity providers, analyse rich data sets in real time to work out the best way to deal, and using an array of algorithms ( perhaps even arranged in an ‘ algorithm wheel ’ ) to execute at speed with minimal price impact, she gets an exceptional service from fx markets. i say ‘ she ’ quite deliberately here too – because, as i discussed back in june in a different speech, 7 technological innovation means embracing diversity – of people, ideas, and working practices – is no longer a choice, it ’ s a business necessity. for heavily - traded currency pairs, our hypothetical fx trader is getting bid / ask spreads that are a fraction of a basis point for a $ 1m trade, rising to a few basis points for a large trade. and she ’ s taking see for instance https : / / www. bis. org / publ / mktc10. htm and https : / / www. marketfactory. com / whitepaper - why - does - fragmentationcontinue - to - increase - increasing - entropy - in - currency - markets / see for instance my predecessor ’ s speech on fast markets at https : / / www. bankofengland. co. uk

comes from viewing these metrics at different spatial resolutions – regional, local authority, postcode even. this allows a “ micro - to - macro ” jigsaw of the economy to be pieced together, as with other complex systems. patterns in these systems often self - replicate at different resolutions ; they are “ fractal ”. 7 one interesting question is whether economic systems also exhibit self - replicating patterns. if so, this has implications for how we understand and model them. we consider these questions using a sequence of maps. many of these maps are not new. for example, philip mccann from the university ’ s productivity insights network ( pin ) has published an excellent book setting out a range of fascinating regional facts and maps. so too have others. 8 these maps provide useful context when testing the tip o ’ neill hypothesis and when modelling and managing the economy. to provide the clearest visual guide, these maps are scaled by economic rather than geographic size – so - called cartograms. 9 each region is initially scaled to have the same geographic area and then rescaled in line with economic differences. this means some areas shrink ( such as scotland ) while others expand ( such as london ) even without differences between them. this helps when visualising local differences. ( a ) differences between regions to fix ideas, charts 1a and 1b plot a map and an accompanying cartogram of population by region in the uk and, by way of comparison, germany. it uses a resolution one - level below the national – administrative “ regions ” in england and each of scotland, wales and northern ireland. comparing the map and cartogram suggests the uk has a significant demographic skew towards london and the south - east. germany has nothing like the same skew, with the cartogram and map little different. 10 a key focus of work among economic geographers is the importance of agglomeration effects – that is, increasing returns to economic scale at the spatial level. 11 if those effects are powerful, and if workers are one of their most important sources, we would expect cartograms to have similar properties when looked at by population, income ( per head ) and wealth ( per household ). more should not only be merrier but wealthier. for example, case and deaton ( 2017 ). for example, viscek, shlesinger and matsushita ( 1994 ). mccann ( 2016 ), centre for cities ( 2019 ), what works