Friend or foe? Information technology and the London Stock Exchange since 1700

Abstract Lacking the obvious spatial co-ordinates of resources, people or industries, the geography of finance has been rather neglected until recently. Within the research that has been done, there is little treatment of securities markets and the forces determining their location over time. As financial markets were especially sensitive to information flows, communications must have played a major role in determining the location of stock exchanges. As the ability to communicate changed, due to improvements in the technology of transport and then telephony, this would have a major impact on both the securities market as a whole and the location of individual components. When did an integrated securities market emerge in Britain and then worldwide? Did improved communications allow trading to be centralized in London or permit its dispersal to other centres at home and abroad? More recently, has the removal of capacity constraints on information flows, due to the revolution in computing technology, have an even more profound impact on the securities market? Can one now refer to a global securities market devoid of location—an end of geography? As this paper shows, the historical experience can shed much light on the forces at work within the securities market, including that produced by changes in information technology. In addition, the historical evidence reveals the impotant role played by stock exchanges not only as organized markets, but as regulatory bodies. Thus, though trading might disappear within programmed electronic networks, linking offices worldwide, supervision is still required to be embedded within particular jurisdictions, and that necessitated specific locations—a re-ordering of geography?