The Bank for International Settlements (BIS) recently released a report stating that high-frequency trading is causing liquidity shortages in financial markets.

The report explains that the increase in electronic trading and market fragmentation has led to sudden price swings and flash crash events. Traditional exchanges have lost a significant amount of market share, particularly in equity markets.

Although market conditions may seem calmer now, they are more vulnerable to abrupt and severe disruptions. This changing landscape presents challenges for market participants as they navigate a complex trading environment.