Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/287649 
Year of Publication: 
2021
Citation: 
[Journal:] International Journal of Disclosure and Governance [ISSN:] 1746-6539 [Volume:] 18 [Issue:] 4 [Publisher:] Palgrave Macmillan UK [Place:] London [Year:] 2021 [Pages:] 315-335
Publisher: 
Palgrave Macmillan UK, London
Abstract: 
The U.S. financial markets faced an unprecedented rapid decline and recovery on May 6, 2010, known as the May 6 flash crash. Roughly one trillion $ market value in less than thirty minutes vanished with the biggest one-day point decline in the history of the DJIA at the time. Since the market events took place in electronic markets, and algorithmic trading and high-frequency trading, parts of FinTech, played significant roles, we handle the May 6 flash crash from the FinTech, SupTech, and financial supervision perspectives. With the flashback method, we analyzed the reactions of market participants, media, and two financial supervisors, the SEC, and the CFTC, to the market crash. We find that the technological imbalance between financial markets or institutions and their supervisors drove the markets in uncertainty, hence in a fear and panic environment. Since the imbalance has not diminished yet, the same risks still exist. As a remedy, we introduce a new concept and model with a well-functioning SupTech system to cope with the May 6 type FinTech crises.
Subjects: 
Supervisory technology
SupTech
FinTech
RegTech
Financial supervision
Financial system
Prudential supervisory disclosure
Financial authority
Digital finance
May 6 flash crash
FinTech crises
Financial crises
Financial stability
Informational efficiency
Systemically important data
Systemically important markets
Know-your-data
Know-your-technology
Know-your-markets
Inform-your-markets
JEL: 
D47
D53
G18
G01
G28
H11
K22
K23
L15
O31
O32
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Article
Document Version: 
Published Version

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