Future Shocks: Can Regulators Stop the Next Flash Crash?

Almost two years on, the cause of the May 2010 financial markets "flash crash" that wiped US$1 trillion in shareholder equity before bouncing back is still unknown, but plenty of fingers have been pointed at possible culprits for this electrifying event. Aiming to avoid a repeat, securities exchanges around the world now are following the lead of the US regulator by bringing on circuit breakers. Michael Aitken, chair of Capital Market Technologies at the University of New South Wales, says there's no evidence to support market design changes soon expected to be introduced in Australia. While gathering evidence is costly, he argues, it's the best way to stop future shocks.