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http://www.guardian.co.uk/commentisfree/2012/sep/23/high-frequency-trading-city-of-london
‘Most of our political leaders cannot imagine what a British economy might look like without a free-wheeling financial sector.' Photograph: Davis Mccardle/Getty
Four years ago, as they looked into the post-Lehman Brothers abyss, our political leaders promised "never again". Both David Cameron and Vince Cable have called for a new "responsible capitalism", where banks would invest for the long term. But behind the scenes the Treasury is sabotaging efforts to control one of the most extreme forms of casino capitalism – "high-frequency trading". And that tells us a great deal about our ruling elite's real plans for Britain's economic future.
The past fortnight has seen growing calls for curbs on HFT – the use of complex computer systems that spot market patterns, buy millions of shares and hold them for micro-seconds before selling them on. Last Thursday, a US Senate committee heard harsh criticisms of these technologies, and the head of the Australian stock exchange denounced some practices as "inherently dangerous". Meanwhile, MEPs have announced plans to impose severe regulation. The Treasury, however, has been fighting to dilute any reform, claiming that HFT makes markets more efficient.
HFT generates huge profits for financiers and stock exchanges, but many blame it for market volatility and crashes. The most recent victim was the American firm, Knight Capital, which almost collapsed last month when a computer malfunction cost it $440m. More serious was the "flash crash" of 2010, when these technologies briefly sent American shares plummeting and threatened market panic.
HFT also reveals a deeper problem with the economy of the last few decades: finance's extreme short-termism, and the funnelling of resources into trading rather than investment and jobs.
*** who ever thought it was a good idea to erect a fancy dildo in the middle of london?
‘Most of our political leaders cannot imagine what a British economy might look like without a free-wheeling financial sector.' Photograph: Davis Mccardle/Getty
Four years ago, as they looked into the post-Lehman Brothers abyss, our political leaders promised "never again". Both David Cameron and Vince Cable have called for a new "responsible capitalism", where banks would invest for the long term. But behind the scenes the Treasury is sabotaging efforts to control one of the most extreme forms of casino capitalism – "high-frequency trading". And that tells us a great deal about our ruling elite's real plans for Britain's economic future.
The past fortnight has seen growing calls for curbs on HFT – the use of complex computer systems that spot market patterns, buy millions of shares and hold them for micro-seconds before selling them on. Last Thursday, a US Senate committee heard harsh criticisms of these technologies, and the head of the Australian stock exchange denounced some practices as "inherently dangerous". Meanwhile, MEPs have announced plans to impose severe regulation. The Treasury, however, has been fighting to dilute any reform, claiming that HFT makes markets more efficient.
HFT generates huge profits for financiers and stock exchanges, but many blame it for market volatility and crashes. The most recent victim was the American firm, Knight Capital, which almost collapsed last month when a computer malfunction cost it $440m. More serious was the "flash crash" of 2010, when these technologies briefly sent American shares plummeting and threatened market panic.
HFT also reveals a deeper problem with the economy of the last few decades: finance's extreme short-termism, and the funnelling of resources into trading rather than investment and jobs.
*** who ever thought it was a good idea to erect a fancy dildo in the middle of london?
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