Determined to avoid a repeat, the heads of the Federal Reserve Board, the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Treasury Department have huddled regularly since 1987. Significant upgrades have been made in the country's financial plumbing. By June, the New York Stock Exchange expects to be able to trade up to 3 billion shares daily, versus only 189 million on average in 1987. If the Dow's loss grew to 550 points later in the day, the exchange would shut down for an hour. The Nasdaq Stock Market and other exchanges have agreed to stop trading when the Big Board does.
Talk is good.
Communication among regulators and major markets is vastly improved, too. Regulators have put together manuals listing procedures to be followed in market declines of varying degrees, plus the home phone numbers of all key players. For fund investors, perhaps the most visceral frustration of the 1987 turmoil was their inability to call in to check prices, let alone to trade. Even at giant Fidelity, some shareholders fumed for an hour or more on hold, only to give up. Investors assuming their computer and a mouse will avoid old-style telephone jams could be disappointed.