Reforming Electronic Markets and Trading
by Hazel Henderson
Computer-driven financial markets on unregulated electronic exchanges programmed by algorithms now dominate Wall Street, along with high-frequency trading (HFT). The infamous “Flash Crash” in May 2010, driven by electronic trading, caused stocks in many 401Ks to suddenly fall to pennies and recover in split seconds. Small investors lost confidence, pulling some $70 billion out of stock markets.
While Wall Street recovered, trust eroded further due to the losses, foreclosures, job cuts and taxpayer bailouts after the 2008 meltdown. Today, the public’s trust is battered by news of fraud, insider-trading, rigging of interest rates and huge fines on formerly admired banks paid by shareholders and taxpayers instead of indicting financiers. Regulators in Washington are out-gunned by the faster computers and technology of HFT. Even market players are sounding alarms.
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Hazel Henderson, D.Sc.Hon., FRSA, founder of Ethical Markets Media, is a futurist, evolutionary economist and author of award-winning Ethical Markets: Growing the Green Economy. She leads the Transforming Finance initiative, created the Green Transition Scoreboard®, tracking global private sector investment in green tech, and developed with Calvert Group the widely used alternative to GNP, the Calvert-Henderson Quality of Life Indicators. In 2010 she was honored as one of the “Top 100 Thought Leaders in Trustworthy Business Behavior 2010” by Trust Across America.
