WASHINGTON, May 9 (UPI) -- Sen. Christopher Dodd, D-Conn., says computerized automated trading that triggered a nearly 1,000-point drop on Wall Street shows the need for financial reform.
Dodd, chairman of the Senate Banking Committee, called Thursday's drop in the Dow Jones industrial average of more than 900 points in a matter of minutes a "remarkable event," but said "no one has come up with the answer yet as to why this happened."
"High-frequency trading is a new phenomenon, using these very fancy computers that can move in microseconds. The idea behind it was, of course, this would create greater fairness, take emotion out of trading, would work well for investors. But it didn't calculate -- it's all math-driven," Dodd told Bob Schieffer on CBS News's "Face The Nation" Sunday.
Dodd said he planned hearings on the need for market circuit-breakers and was working on a bill with Sen. Richard Shelby, R-Ala., the ranking-Republican member on the banking panel, to deal with systemic risk in financial markets.
"I believe what's really happened is the technology has gotten ahead of the regulators, and the regulators have got to get ahead of the technology," Shelby said.