There will shortly be what is known as the Big Bang in the UK and this has caused a great deal of activity in the City with companies that have traditionally performed separate functions being allowed to merge, and several giant financial organisations forming. Sophisticated computer systems are planned, and apart from just displaying information, I expect there will be more programs to buy and sell automatically. Another aspect of the mergers will be the need to establish what are called Chinese Walls within institutions to prevent the unethical use of confidential information. For example, one part of an institution may be giving financial advice to some company which another part of the same institution could use to speculate - the same institution would not have been allowed to perform both roles under the regulations before the Big Bang. The Chinese Wall problem is really a standard security problem with the computing system being divided up into multiple partitions between which information flow is not allowed.
Human leakage is likely to be more of a problem.
Increasing dependence on technology has obvious reliability implications, but I am more concerned about whether automatic trading is likely to have a destabilising influence. I feel that programs will be able to react too quickly for the wrong reasons with possibly disastrous consequences. Equally, they could create a false sense of security and an artificially inflated market by buying instead of selling. Although some of these concerns are political rather than technical, and I am in no sense a financial expert, I would appreciate a discussion of these issues and some information about the heuristics and safeguards built into these automatic trading programs. Robert Stroud, Computing Laboratory, University of Newcastle upon Tyne.