Yet liquidity – the ability to shift significant quantities of assets in a short period without large price movements – has probably declined, which is the second of the structural changes worth noting. Certainly the willingness of banks and others to act as market-makers in the way they did in the past will have diminished considerably.
Their proposition is that, in the digital age, banks can either vanquish or vanish. And of course, there is a good case for being prepared for change. Financial practices are definitely evolving – and it’s a one-way street. We are seeing change in every segment of banking, from instant payments to mobile banking and robo advice. Some institutions offer their services solely on smartphones.