Prudential supervisory disclosure (PSD) with supervisory technology (SupTech): lessons from a FinTech crisis
| Autor: | Ibrahim E. Sancak, Stefan Zeranski |
|---|---|
| Rok vydání: | 2021 |
| Předmět: |
Flash crash
Economics and Econometrics 050208 finance Electronic markets business.industry Strategy and Management Corporate governance 05 social sciences Financial market Financial system Crash Accounting computer.software_genre Discount points Corporate finance 0502 economics and business Business 050207 economics Business and International Management Algorithmic trading Market value computer Finance |
| Zdroj: | International Journal of Disclosure and Governance. 18:315-335 |
| ISSN: | 1746-6539 1741-3591 |
| DOI: | 10.1057/s41310-021-00111-7 |
| Popis: | The U.S. financial markets faced an unprecedented rapid decline and recovery on May 6, 2010, known as the May 6 flash crash. Roughly one trillion $ market value in less than thirty minutes vanished with the biggest one-day point decline in the history of the DJIA at the time. Since the market events took place in electronic markets, and algorithmic trading and high-frequency trading, parts of FinTech, played significant roles, we handle the May 6 flash crash from the FinTech, SupTech, and financial supervision perspectives. With the flashback method, we analyzed the reactions of market participants, media, and two financial supervisors, the SEC, and the CFTC, to the market crash. We find that the technological imbalance between financial markets or institutions and their supervisors drove the markets in uncertainty, hence in a fear and panic environment. Since the imbalance has not diminished yet, the same risks still exist. As a remedy, we introduce a new concept and model with a well-functioning SupTech system to cope with the May 6 type FinTech crises. |
| Databáze: | OpenAIRE |
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