New York’s capital and global financial markets missed an opportunity to try and operate without traders on the floor during Hurricane Sandy, said Ron D’Vari, CEO and co-founder of NewOak Capital.
After September 11, 2001, the plan was to have contingency plans in place, as well as the latest technology, so trading activity could operate in dangerous conditions with key employees working from remote locations. Those plans changed Sunday night when Hurricane Sandy barreled straight for New York, prompting the stock exchanges and SEC to close the markets Monday.
“Had SEC not shutdown all equity markets, Sandy’s punch would have tested the latest technology to ensure the smooth functioning of electronic markets without a floor trading to support it,” said D’Vari.
Instead, the markets closed, ending trading for both the equities and the bond markets. Even the Federal Reserve Bank of New York said it would not go forward with mortgage-backed securities transactions until at least mid-week.
“Hurricane Sandy would have been a real first test of the business continuity plans that all regulated entities and public financial firms have had to put in place. While some were skeptical, most authorities seemed to be confident the overall markets would function adequately without floor trading,” said D’Vari.
But with the markets closed, those plans for testing will have to wait.