Receiving Wide Coverage ...
Nasdaq Outage: The Nasdaq stock exchange went down for three hours on Thursday, after a technical glitch caused connectivity issues and interrupted its ability to quote prices. The failure "delivered another black eye to Nasdaq, which was bruised by last year's botched initial public offering of Facebook," reports the Journal. This incident, coupled with Goldman's rogue computer problems from earlier this week, has also raised new questions about the high-speed, computerized structure of our financial markets. "While regulators and market participants have taken several steps to strengthen their systems, the problems this week suggest that the flaws in the markets have not been repaired, and may actually be getting worse," Dealbook notes. Perhaps not-so-surprisingly, the Journal is reporting that the Commodity Futures Trading Commission is moving to rein in high-speed trading by developing a road map it can use to develop rules for the practice. "The road map, which must be approved by the commission before it is officially released, could pave the way for more direct scrutiny of such activities," one agency commissioner tells the paper. Back in March, the Securities and Exchange Commission proposed rules intended to prevent these types of technical snafus, but the exchanges have fought against them. In a statement following the Nasdaq meltdown, SEC chairman Mary Jo White said she would move to have the proposal approved. Washington Post, Financial Times
Downgrade Ahead? Moody's threatened to downgrade the nation's largest banks on Thursday, believing that the government is more likely to let them fail in the event of another financial crisis. The move, which could affect Goldman Sachs, JPMorgan Chase, Morgan Stanley, Wells Fargo, and possibly Bank of America and Citigroup, is likely to stoke the fire around the continuing "too big to fail" debate. "Moody's decision to review the ratings will reinforce the beliefs of those who say Dodd-Frank's measures are sufficient to deal with the 'too big to fail' issue," notes Dealbook. "But the actions of lawmakers who do not feel the act is adequate may have also contributed to Moody's actions." Standard & Poor's expressed similar sentiments about downgrading big banks back in June, believing that, while government bailouts were still a possibility, bondholders may be forced to shoulder losses, notes the Financial Times.
Some Friday Light Reading: The Post looks at what to expect from the Jackson Hole central banker symposium, set to take place over the next few days. "The hubris of 2005 has been replaced with a wary reluctance," writes columnist Neil Irwin. "This next three days in Wyoming, then, will be about exploring what we know now about which of [the central bank's] strategies is helping and how much, what risks they're creating in the process, and what the toolbox for central banks should look like in the years ahead." (See the Journal for a less metaphorical take as it actually outlines the full agenda.) Meanwhile, the Times' Binyamin Applebaum profiles Federal Reserve Chairman Ben Bernanke, who, as you may have already heard, won't be visiting Jackson Hole this year. "Bernanke will be remembered for helping to arrest the collapse of the financial system in 2008," he writes. "But what [he] did after the crisis may prove to have even more enduring influence."
Several U.K. councils are weighing a ban on payday loan billboard ads.
New York Times
Some of the U.K.'s biggest banks, including Barclays and HSBC, will have to pay a total of up to $2 billion to credit card customers who were sold financial products they didn't need or whose benefits were "exaggerated."