UPDATE 1-US market crash shows need for regulatory revamp

WASHINGTON, May 9 (BestGrowthStock) – Wall Street’s unexplained
plunge last week and Greece’s debt problems posed systemic
risks and underscored the need for financial regulatory
overhaul, a top U.S. lawmaker said on Sunday.

U.S. Senate Banking Committee Chairman Chris Dodd told
CBS’s “Face of the Nation” program that authorities had not yet
figured out the events of last Thursday, which saw the Dow
Jones industrial average tumble nearly 1,000 points.

“We need some answers pretty soon. This is an issue that
raises systemic risk. The problems in Europe raise system
risk,” Dodd said. “We need to get in place a bill, have the
president sign it so that we have tools to protect our economy
from these kinds of events.”

Market participants have speculated high-frequency and
algorithmic trading magnified the wild swing. The debt problems
in Greece have raised fears of contagion to other nations in
the euro area with budget problems.

These fears overshadowed a string of robust U.S. economic
data, including a 290,000 gain in nonfarm payrolls in April.

“What you’re getting is finance is getting detached from
the real economy. You are getting some of this casino
environment that is appearing in our markets. It does not
reflect what is going on in the real economy,” Dodd said.

“Clearly the Securities and Exchange Commission needs to
act, they need to step up very quickly and let us know what
happened here and what steps need to be taken. I don’t think
you need legislation in this area. You need the regulators to
step up.”
Stock Market Report

(Reporting by Lucia Mutikani; Editing by Maureen Bavdek)

UPDATE 1-US market crash shows need for regulatory revamp