Hochgeschwindigkeitshandel

“High-speed trading.” On 25 Sept. 2012 the German social democrat party SPD (the opposition to Chancellor Angela Merkel’s conservative CDU/CSU + FDP coalition) announced their new proposed financial platform of increasing banking regulation, splitting “universal” banks into a business bank and an investment bank, creating an FDIC-type emergency fund with the banks’ own money to save troubled banks, capping mortgage debt at 80% of the unit’s value and limiting high-speed stock trading. One day later, on 26 Sept., Germany’s financial minister Wolfgang Schäuble (CDU) announced that the German government wants to limit high-speed stock trading.

ZDF heute journal said the government was now calling for the following: registration of high-speed traders, disclosure of computer code if a problem occurs and higher fees after too many “fake attacks” in which high-speed traders pretend to buy a stock in order to drive up the price, then rapidly cancel the larger purchase and sell what they were actually holding at the new higher price.

Respect for Wolfgang Schäuble’s quietly reasoned-sounding explanations. Simple, straightforward, highly credible-sounding. He does a great job with them. He’s also quite clever, distracting me from banking reregulation by seizing on this high-speed trading point.

According to tagesschau.de, Schäuble is calling for “mandatory licensing for high-speed traders. Transparency that enables the supervisory authority to identify abuses faster. And the ability for the stock market supervisory authority to, when bad developments are identified in the market, to immediately halt trading.” On 26 Sept. his political opponent in the SPD responded that this doesn’t go far enough and called not only for licensing of trading firms but also of trading algorithms. Germany’s Green Party said the simplest way to handle this would be to forbid high-speed trades, and furthermore that the government is limiting itself to too much of an observing, witness, role, rather than regulating. And the techie German Pirate Party said…?

(HOKE geh SHVIN dig kites hon dell.)

One thought on “Hochgeschwindigkeitshandel

  1. Pingback: Möglicherweise bevorzugt behandelt | German WOTD

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