NEW YORK (Reuters) - A top U.S. regulator called for the creation of a new body that could prevent a repeat of the confusion that reigned in capital markets when Superstorm Sandy caused widespread damage to New York and New Jersey.
The financial industry was “reckless” in being poorly prepared for Sandy which ravaged the U.S. East Coast in late October, Commodity Futures Trading Commission (CFTC) Commissioner Bart Chilton told a conference on Tuesday.
“Given the problems we saw with Sandy, we need (an) organization, with a specific mandate, to make sure we don’t have this kind of floundering in an emergency again,” Chilton said in his speech for a business audience.
He called for a body similar to the Financial and Banking Information Infrastructure Committee (FBIIC) or the Financial Services Sector Coordinating Council (FSSCC).
In the immediate aftermath of the storm, it appeared that market participants had not properly tested contingency plans and in many cases were unclear whether they should redirect trades themselves, or whether that exchange operators would do that for them.
This had in turn led to anxiety to even use the back-up facilities, according to Chilton, a Democrat. Sandy forced U.S. equities markets to shut down for two days.
“Major firms should have people at a high enough level, with necessary training and skills, living and working sufficiently distanced from the main entity site,” he said.
Reporting by Douwe Miedema; Editing by Tim Dobbyn