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The Future of Computer Trading Report of Foresight

Wed, 31 Oct 2012 05:40:49 GMT

Hurricane Sandy is one of the biggest hurricanes in the history of the United States with an estimated damage of 30 billion USD, a lot of money. The flash crash on May 6th 2010 caused a drop of 9 percent in the world equity markets in a matter of 30 minutes wiping out 6 trillion USD of market market capitalization. This is 200 times more damage than the hurricane.

The published report of The Future of Computer Trading in Financial Markets by the Foresight Project fails to highlight, how destructive financial markets can be. 150 experts were asked to contribute, where the CEO of Olsen Ltd, Richard Olsen, was one of them. Today, we are ill equipped to provide conclusive evidence about the impact of computer trading and the requirements for an appropriate operational and regulatory framework. The report does not explain the importance of having well behaved financial markets and the need for funding of research in this field, not just of a few millions of USD, but a significant fraction of the potential damage of another flash crash.

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