Algo trading feedback loops an urgent worry, Carney warns

Some traders don't understand risks of algos, BoE says

Bank of England governor Mark Carney
Mark Carney, Bank of England

Supervisors need to improve their understanding of electronic trading, work the Bank of England (BoE) is taking forward, governor Mark Carney said on January 26.

Carney told a session of the UK parliament's Treasury Committee that recent episodes of volatility, such as the bund crisis and taper tantrum, showed signs that algorithmic trading might have created destructive feedback loops.

In such a situation, the human traders step away from the market, he said, until "algorithms have run their

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