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European Central Bank President: High Frequency Trading to Pose Risks to the Financial System

European Central Bank President: High Frequency Trading to Pose Risks to the Financial System

 

New York, NY -- (SBWIRE) -- 09/21/2011 -- High-Frequency Trading Leaders Forum 2011, "How Speed Traders Leverage Cutting-Edge Strategies in the Post-Flash Crash World" (http://www.HFTLeadersForum.com), Hosted by Golden Networking, now in Chicago, Sao Paulo, Singapore and Hong Kong

As reported by Bloomberg’s Jim Brunsden and Christian Vits, high-frequency trading firms and so-called shadow banks such as money-market funds require more scrutiny from regulators on the risks they pose to the financial system, European Central Bank President Jean-Claude Trichet said. How significant these risks might be for the financial system will be discussed at Golden Networking’s High-Frequency Trading Leaders Forum 2011 (http://www.HFTLeadersForum.com), Chicago, October 3-5, Sao Paulo, October 24-26, Singapore, November 13-15 and Hong Kong, December, 12-14, forums that will provide the most up-to-date overview of cutting-edge developments and insights to build a competitive advantage in high-frequency and quantitative trading.

High-frequency traders should be studied as part of a broader push by supervisors to understand “financial innovation and technological advances,” Trichet said today in the text of a speech to the Eurofi financial services forum in Wroclaw, Poland. Authorities must “identify, monitor and assess the potential threat to market stability” such firms pose, he said.

“We are far from understanding the potential global systemic instability that is associated today with the sheer size of the non-banking sector which experienced an exponential growth over the last 20 years,” Trichet said on the eve of a meeting of euro-area finance ministers seeking to tackle the region’s debt crisis. “I would call all of us to better understand this aspect of the global financial dynamics.”

The role of high-frequency firms in periods of market swings has come under scrutiny since the May 6, 2010, crash that briefly erased $862 billion from U.S. share values. Traders and other professional investors were said to have withdrawn bids as the selloff worsened, according to a Sept. 30 report from the Securities and Exchange Commission and Commodity Futures Trading Commission. Regulators and exchanges later installed curbs to limit market disruptions.

High-Frequency Trading Leaders Forum 2011, "How Speed Traders Leverage Cutting-Edge Strategies in the Post-Flash Crash World" will bring hundreds of attendees in Chicago, Sao Paulo, Singapore and Hong Kong key insights to build a competitive advantage in High-Frequency Trading. High-Frequency Trading Leaders Forum 2011 is produced by Golden Networking (http://www.goldennetworking.net), the premier networking community for business executives, entrepreneurs and investors. Panelists, speakers and sponsors are invited to contact Golden Networking by sending an email to info@goldennetworking.net.