Global bank regulators seek more risk controls around algo trading
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BANKS need to put in place more stringent standards around algorithmic trading to help reduce risks to the financial system as trading becomes more electronic and increasingly complex, a group made up of global regulators said.
Most trading firms are highly automated and use pre-programmed instructions, known as algorithmic trading strategies, to make lightning-fast decisions on which securities to buy and sell, with little human intervention. Banks regularly use algorithmic trading strategies and have high-frequency trading firms as clients.
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