Ted Kaufman - United States Senator for Delaware

Kaufman Statement on European Debt Crisis, Sudden Stock Market Plunge

May 6, 2010

WASHINGTON, D.C. – Senator Ted Kaufman (D-Del.) released the following statement after learning Thursday that the Dow Jones Industrial Average dropped and recovered sharply in a matter of minutes:
 
“As I said on the Senate floor today, the growing sovereign debt and banking crisis in Europe is very troubling.  The U.S. needs to get its financial house in order through strong Wall Street reforms that will serve as a lasting bulwark against financial instability.
 
“I also have been warning for months that our regulators need to better understand high frequency trading, which appears to have played a role today when the US market dropped 481 points in 6 minutes and recovered 502 points just 10 minutes later.  The potential for giant high-speed computers to generate false trades and create market chaos reared its head again today.  The battle of the algorithms – not understood by nor even remotely transparent to the Securities and Exchange Commission – simply must be carefully reviewed and placed within a meaningful regulatory framework soon.”

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