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Ethics for Automated Financial Markets

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Handbook on Ethics in Finance

Part of the book series: International Handbooks in Business Ethics ((IHBE))

Abstract

Financial markets are now ecologies of trading algorithms. In this chapter, we propose market effectiveness as the ethical goal of automated markets and review the professional, organizational, and industry-wide ethics in this domain. We present criteria for what counts as both a prudent and ethical automated trading system. We argue that an ecology of such systems unfettered by excessive regulation will evolve to promote the effectiveness goal. Largely, this is already occurring. Then, we look to the future, investigating new issues that are arising around the use of artificial intelligence and alternative data sources and possible courses of action. However markets evolve, as long as their effectiveness as we define it increases, the outcome ought to benefit society.

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Author information

Authors and Affiliations

  1. Stuart School of Business, Illinois Institute of Technology, Chicago, IL, USA

    Ricky Cooper

  2. Center for the Study of Ethics in the Professions, Lewis College of Human Sciences, Illinois Institute of Technology, Chicago, IL, USA

    Michael Davis

  3. Stuart School of Business, Illinois Institute of Technology, Chicago, IL, USA

    Andrew Kumiega

  4. Center for Strategic Finance, Stuart School of Business, Illinois Institute of Technology, Chicago, IL, USA

    Ben Van Vliet

Authors
  1. Ricky Cooper
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  2. Michael Davis
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  3. Andrew Kumiega
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  4. Ben Van Vliet
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Corresponding author

Correspondence to Ben Van Vliet .

Editor information

Editors and Affiliations

  1. ECRI Ethics in Finance Research Group, University of the Basque Country, Bilbao, Spain

    Leire San-Jose

  2. ECRI Ethics in Finance & Social Value, Deusto Business School, Bilbo, Vizcaya, Spain

    José Luis Retolaza

  3. University of Antwerp, Antwerpen, Belgium

    Luc van Liedekerke

Section Editor information

  1. ECRI Ethics in Finance Research Group, University of the Basque Country. UPV/EHU, BILBAO, Spain

    Leire San-Jose

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Cooper, R., Davis, M., Kumiega, A., Van Vliet, B. (2020). Ethics for Automated Financial Markets. In: San-Jose, L., Retolaza, J., van Liedekerke, L. (eds) Handbook on Ethics in Finance. International Handbooks in Business Ethics. Springer, Cham. https://doi.org/10.1007/978-3-030-00001-1_18-1

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  • DOI: https://doi.org/10.1007/978-3-030-00001-1_18-1

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-030-00001-1

  • Online ISBN: 978-3-030-00001-1

  • eBook Packages: Springer Reference Religion and PhilosophyReference Module Humanities and Social SciencesReference Module Humanities

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