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Colin Clark
10 Oct, 2011 | 10:32 AM
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Remember the 1987 stock market crash? The most significant regulatory response to that event was to establish a market-wide circuit breaker in 1988, which halts the market if it falls at least 10% (see table at bottom). The halt closes all US markets, including equities and derivatives. You may not even know this market-wide circuit breaker exists. It has only been triggered one day (October 27, 1997) in 23 years. When the Dow fell 9.2% on May 6, 2010 (the “Flash Crash”), it was not a large enough decline to trigger a halt. ...