I recently read a paper by Terje Lensberg (2014) "Costs and benefits of financial regulation: Short-selling bans and transaction taxes" where he analyzed the effects of financial regulation (short selling bans, transaction taxes, ban of all leveraged products) on trading activity. In all cases you will find that good liquidity comes at the cost of high short-term volatility and therefore is best under the current regulatory regime.
My question refers to an idea from the Austrian economist Stephan Schulmeister. He once mentioned that implementing trading in two-hour cycles (no high-frequency trading anymore) would lead to better analysis of companies because traders would focus more on fundamental data than on trends and speculative material. He was also one of the first who supported transaction taxes.
I personally do not see how his idea would help to improve financial markets, do you have any idea?