Jim Armitage: This flash crash must not be shrugged off

Forget the market reactions to Brexit. For anyone trading currencies, last night’s flash crash was far more terrifying.

On referendum night, investors stayed up watching the results come in and reacted logically as events unfolded. But this morning, out of a clear blue sky, the pound fell 6%. No rhyme, no reason. Two minutes later, it rebounded almost as if nothing had happened.

Yet despite this mini-revolution in one of the world’s most powerful currencies, there is no clamour to find out why.

In January, the rand fell 9% in a similar way, the Kiwi dollar the August before that. But again, we shrugged, tutted “algorithmic trading” and forgot about it.

That’s not good enough. For once, why don’t the international regulators get together and work out, properly this time, exactly what happened; who profited, which trades came from which servers, why and how. And I mean properly how, not just blame-a-day-trader-in-Hounslow how.

Armed with that knowledge, perhaps we could see if algos need better regulation, more circuit-breakers in times of low volumes, or, heaven forbid, if we really need them at all.