High-Speed Trading, Interest Rates Pose Risks, Treasury Says
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The U.S. financial system’s vulnerabilities include a sudden spike in interest rates amid greater risk-taking and high-frequency trading, the Treasury Department said.
While threats to stability have “generally abated” from a year ago, they remain in markets for short-term funding and credit, interest rates and volatility, and in automated, high-speed trading that represents a significant portion of daily equity and foreign exchange volumes, the Treasury’s Office of Financial Research said in its annual report released today in Washington.