Crisis Command for Markets Needed: CFTC's Chilton

The trouble with Wall Street's contingency plans during Super Storm Sandy was simply that they had never been adequately tested, says U.S. Commodity Futures Trading Commissioner Bart Chilton, and he's pushing to correct that with a new emergency command structure.

CFTC Commissioner Bart Chilton
Source: U.S. Governement

"They had a system, a backup system ... Archipelago," he told CNBC's Squawk Box, referring to the system also known as NYSE Arca. "The major firms hadn't tested the system so they were unsure whether or not the trades were going to get into the queue."

Trading on the New York Stock Exchange was suspended for two days due to the storm, while Wall Street's lower Manhattan neighborhood was under water.

Chilton said he's calling for a multi-agency command, looking to military disaster-preparedness models, to ready financial markets for the next disaster.

Do Markets Need a Better Crisis Plan?
Do Markets Need a Better Crisis Plan?

He said that if a backup system were in place that traders and firms had tested and had confidence in, "It should be you flip a switch and everybody continues trading."

He said the problem this time was the lack of preparedness. "It's not like this hurricane snuck up on us. We knew it was coming. You could have made contingency plans."

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