The former City minister said that high-frequency trading also known as black box trading had been a "contributing factor" in the harsh swings which have led to more than £300bn being wiped off the value of British shares since the beginning of July.
He wants both the Treasury and the Financial Services Authority (FSA), the City regulator, to investigate thoroughly the phenomenon and the impact it has.
High-frequency trading (HFT), which accounts for as much as 50pc of trading in London, has been blamed for exacerbating intra-day swings and putting ordinary investors at a disadvantage due to the speed with which such trades are placed in the market.
Lord Myners, the former fund manager, also called for European banks, which have been at the centre of the storm, to be more honest to investors and increase levels of disclosure of the sovereign debt they are holding.
His calls on disclosure were echoed by Georges Pauget, an adviser to the French government, who said banks must be more open with investors if they are to end the market fears that have led their share prices to collapse in recent weeks. The comments from the two men come after a wild week in global stock markets.
The nadir came last Wednesday, when investors moved strongly against Societe Generale, France's largest bank, forcing its shares down as much as 20pc. As a result, European regulators chose to ban shorting on banks in France and three other countries.
But Lord Myners said that rather than shorting – which he said was not a contributing factor in falling bank shares – there was a "greater need to address" such trading methods.
"High-frequency trading appears so detached from the true function of capital markets, but is potentially fraught with hazard. It definitely deserves more attention than either the FSA or the Treasury has given it."
More from source: Lord Myners calls for inquiry on 'black box' trading - Telegraph
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50% of the trades already HFT ffs!
This HFT tulip should be banned before it reaches 99% - mandate minimum delay of X between such trades, otherwise big fine and ultimately jail time.
Disagree with good Lord on shorting - ban last week helped stabilise the markets, UK refused to implement it but it was enough from EU to deal with it: this shows that ultimately UK won't be able to remain safe heaven with such rules in place because who'd want to list on LSE to get eaten by wolfes when it's much safer for long term company value to list elsewhere where your company will be more protected from speculators?
The core principle of investment should be increase in value, ie going long only - if you don't think some company is good enough to investment long term then don't do it at all. After a while it will force companies to take long term view rather than sack some people to make good quarter. The only people who will truly suffer from this are dirty spekulants (and those who assist them), but that's the sacrifice society can take fairly easily.
He wants both the Treasury and the Financial Services Authority (FSA), the City regulator, to investigate thoroughly the phenomenon and the impact it has.
High-frequency trading (HFT), which accounts for as much as 50pc of trading in London, has been blamed for exacerbating intra-day swings and putting ordinary investors at a disadvantage due to the speed with which such trades are placed in the market.
Lord Myners, the former fund manager, also called for European banks, which have been at the centre of the storm, to be more honest to investors and increase levels of disclosure of the sovereign debt they are holding.
His calls on disclosure were echoed by Georges Pauget, an adviser to the French government, who said banks must be more open with investors if they are to end the market fears that have led their share prices to collapse in recent weeks. The comments from the two men come after a wild week in global stock markets.
The nadir came last Wednesday, when investors moved strongly against Societe Generale, France's largest bank, forcing its shares down as much as 20pc. As a result, European regulators chose to ban shorting on banks in France and three other countries.
But Lord Myners said that rather than shorting – which he said was not a contributing factor in falling bank shares – there was a "greater need to address" such trading methods.
"High-frequency trading appears so detached from the true function of capital markets, but is potentially fraught with hazard. It definitely deserves more attention than either the FSA or the Treasury has given it."
More from source: Lord Myners calls for inquiry on 'black box' trading - Telegraph
---
50% of the trades already HFT ffs!
This HFT tulip should be banned before it reaches 99% - mandate minimum delay of X between such trades, otherwise big fine and ultimately jail time.
Disagree with good Lord on shorting - ban last week helped stabilise the markets, UK refused to implement it but it was enough from EU to deal with it: this shows that ultimately UK won't be able to remain safe heaven with such rules in place because who'd want to list on LSE to get eaten by wolfes when it's much safer for long term company value to list elsewhere where your company will be more protected from speculators?
The core principle of investment should be increase in value, ie going long only - if you don't think some company is good enough to investment long term then don't do it at all. After a while it will force companies to take long term view rather than sack some people to make good quarter. The only people who will truly suffer from this are dirty spekulants (and those who assist them), but that's the sacrifice society can take fairly easily.
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