The chairmen of the two US financial market regulators have each told a Congressional hearing that preliminary investigations have ruled out the suggestion that the market turmoil on May 6 was caused by erroneous or ‘fat fingered’ trades.
Political pressure in the US is mounting to root out the causes of the chaotic trading, in which the Dow Jones Industrial Average dropped nearly 1,000 points in minutes before recovering its losses.
A special meeting of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, entitled ‘The stock market plunge, what happened and what is next?’ was hastily convened on Tuesday May 11.
Mary Schapiro, chairman of the Securities and Exchange Commission, and Gary Gensler, chairman of the Commodity Futures Trading Commission, each told the hearing that their separate – though coordinated – investigations were at a preliminary stage.
But they said...