Prudential supervisory disclosure (PSD) with supervisory technology (SupTech): lessons from a FinTech crisis

Abstract The U.S. financial markets faced an unprecedented rapid decline and recovery on May 6, 2010, known as the 6 flash crash. Roughly one trillion $ market value in less than thirty minutes vanished with biggest one-day point history of DJIA at time. Since events took place electronic markets, algorithmic trading high-frequency trading, parts FinTech, played significant roles, we handle crash from SupTech, supervision perspectives. With flashback method, analyzed reactions participants, media, two supervisors, SEC, CFTC, to We find that technological imbalance between or institutions their supervisors drove uncertainty, hence a fear panic environment. has not diminished yet, same risks still exist. As remedy, introduce new concept model well-functioning SupTech system cope type FinTech crises.