PSE Chief Urges Comprehensive U.S. Review of Financial Markets
LOS ANGELES (AP) _ The federal government should launch a ″full-scale, comprehensive examination of today’s financial markets″ in the wake of October’s market crash, the head of the Pacific Stock Exchange said Tuesday.
″We now have an opportunity to make lasting changes that can make our systems work better in the future,″ Dr. Maurice Mann, chairman and chief executive of the PSE, told a luncheon of the Los Angeles Chamber of Commerce.
″In the past few years, technological developments have enabled marketplaces to become truly globalized, and capital flows are no longer restricted by geographical boundaries and time zones,″ Mann said.
″This was clearly demonstrated the week of Oct. 19 as exchanges in London, New York, Tokyo and elsewhere responded in domino fashion to developments in the U.S.″
Mann said a presidential commission is needed to delve into the issues and problems that surfaced because of the crash.
Referring to the President’s Commission on Financial Structure and Regulation, which laid the groundwork for deregulation of the nation’s depository industry, Mann said ″no less effort″ is needed to study today’s financial markets.
A presidential task force currently is examining the causes of the Oct. 19 crash, but that is taking a ″short-term, quick look,″ said Mann’s spokesman Don Alexander.
What is needed is a comprehensive look at the financial system, Mann said.
While Mann said a major correction in the market was probably overdue, he said he remains puzzled why the market reactly so swiftly and violently on Oct. 19, when the Dow Jones industrial average lost 508 points, or 22.7 percent of its value.