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Former NYSE CEO Dick Grasso on high-frequency trading and the recent cyber attacks on several banks.
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Joining us now as a former chairman and CEO of the New York change Dick Grasso -- great to have you here Lou great to do with let's start with us -- sophistication.
Of the financial industry and in terms of its technology.
It is I think the most unmatched in in American business but these are very serious.
Attacks that are being carried.
Technology.
On Wall Street and in the broader financial community -- is perhaps as sophisticated.
As NASA or any of our deepest and largest governmental operations the difficulty I think is some of the the call -- cyber assassins.
May well have.
Learned a coating.
From various entry points into our financial system realized today.
We have so many online trading venues.
That can be gained by.
People who want to learn code learn access and it's a very serious problem.
Serious problems so serious that there are reports of some very high level meetings taking place right now within the banking industry in particular.
These attacks been carried out against the Pentagon government -- an estimated million of them a day.
-- usually the reports.
Go to the mainland of China as the source for those attacks.
But we have reached a point -- is the saying goes failure is not an option for this financial system and form for business in this country.
Fragile and protected it appears right now insufficiently.
Well here's a perfect example of where a public private partnership.
Can really be very meaningful and very effective the government.
And some of its best people in DOD and some of the deeper if you will -- spy -- networks who really have.
Enormous.
Technological capability together with the people in the financial world have got to get together and build fire -- that are impenetrable.
If the government.
The US government -- the most advanced mines are not working together right now with the financial institutions were in deep trouble -- -- we may be in a deeper kind of trouble when it comes to technology because we don't seem to be -- being.
Finding ourselves capable.
Of extricating ourselves from the impact of high frequency trading.
This is as you know on number of people saying point blank we've got to rein in high frequency trading.
Some suggest well let's do that -- me just let let's take a look at full -- of the trading this week.
Are on the New York Stock Exchange -- we can have that graphic please.
On Monday the trading was three point thirteen.
Three point.
33000000003.
Point 36 Tuesday three point 41 yesterday and today 3.4 zero.
And I know were there when you look at those numbers you're in.
You've got to fill some nausea I would your perspective because of this morning level electorate.
But what percentage.
Estimates range as high as three force it.
Our high frequency trading.
What in the world would that be without high frequency trading in the market.
But it -- it's really an issue of public policy issue that the SEC this CFTC.
And the markets have got to address and I'm not one Lou.
That says you've got to exclude any particular.
Type of trading strategy you've got to be able to regulated and you regulated.
With one very simple test is what a -- -- are doing today in the market.
Detrimental to public confidence and two small investor use in the market if it is have to find a way to neutralize a level playing field.
There we should have more on this thing up along time ago because what we have witnessed after the clients of 2008.
There was a time that they're grass circumstance would probably say -- reports of the country was invested in his marketplace.
Right now you can begin anyone could not begin to say the same thing.
The SEC has been absolutely -- -- -- -- responsible in my opinion on this issue what is -- going to take because you can talk about regulators you're from talked about there.
SEC all of the various agencies.
Where in the world are the business people of the street saying what we have got to run things clean straight and and fix the mess that we've allowed.
You put your finger on it though it's got to be a businesses driven motivation.
And why would they want to do that -- 75% of the trading is HFT because the other 25%.
Won't be there.
If if it keeps up in a manner that's detrimental to the public.
In if they're going to build.
Business here restore confidence of the public and the by the way and it's one of the things people -- -- -- attention to.
The prices in this market place in this country and you used to give the speech all over the world.
Part of those prices those prices reprieve.
Premiums on the most secure in advanced markets in the world.
It can't be said today that session well I wouldn't go that far no I I think you you have to compare what shall we strip three forcing the volume away from people who run.
The exchanges are gonna have a problem I don't wanna do that -- what I want the SEC and the CFTC -- do.
Sit down with the markets and with the heads of the major firms and say listen.
All right sum -- what those HFTs do.
Is positive for the market.
Is positive liars and they argue that's right hey we you and I know each other for thirty years you you know -- -- -- country boy but I do understand markets that's a fact of the matter is.
That that liquidity that's provided can be done -- number of other ways.
And the way that's it's occurring now is deleterious to the interest of the country to the marketplace to the economy.
And what we're about.
A strike at it and and that your point is exactly why this got to be a step back and -- re regulation.
The SEC the CF TCN ninety in well it's about seven years ago.
Regulated and MS the national market system.
It's a disaster it's a failure they've got to start -- over they've got to look the American public and the giants say we're going to carry the Warner for you.
We're gonna get it right.
And we're gonna do with a very simple test if it's right for the least sophisticated user of the market everyone wins.
-- -- They're -- -- by the way he's speaking from experience.
At this point shouldn't have -- Central Park -- -- if it is we'll go to check will drive and west of that excellent thank you very much.
