"Meltdown Moments"
Statement of Commissioner Bart Chilton at the CFTC Technology Advisory Committee
April 30, 2013
Good morning. I want to thank you all for being here, particularly those of you who have been working so hard on this committee, especially Commissioner O’Malia.
Maybe it’s my imagination, but it seems like there’s some new glitch—some new meltdown moment in markets—for us to talk about every time we get together. This time we need only go back a week to just last Tuesday and the Hack Attack. This Hack Attack shows that despite the benefits of electronic trading and social media, putting the two ingredients together can make for a very sorry soup. As many times as these glitches recur, we need not blindly accept that the whiz bang machinery will always work as well as it should. On the contrary, we should open our eyes to the fact that technology has placed us, at times, in a perilous position with regard to financial markets.
It’s worrisome that markets could move so fast based on a hoax. It’s likely that high frequency traders made money on the way down and the way up but there undoubtedly were folks who got caught, lost money and then couldn’t get back in.
This only serves to underscore the importance of better regulation of cheetah traders. While I don’t believe we should be out to make these cats extinct, we need the regulatory tools to keep them in their cages when they go feral.
I want to be brief because I want your take on these topics, so I’ll stop there. Thanks again.
