(Reuters) – European Central Bank policymaker Ewald Nowotny called on Thursday for a regulatory ban on high-frequency trading, saying the technique of using computer algorithms to generate multiple high-speed trades had no practical value.
A day after the European Commission proposed putting the ECB in charge of supervising euro zone banks, Nowotny said it might be better to have clear bans on some financial market activity rather than an approach that leaves banks scope to seek loopholes.
“For example with high-frequency trading there is nothing to be regulated, it is to be banned. There is no really demonstrable net advantage from this (form of trading),” he told a panel discussion at a regulatory conference.
Nowotny, who heads the Austrian National Bank, has no power to implement such a ban, although his comments come at a time when the ECB is being lined up to take a more influential role in supervising banks.