CFA Magazine's January/February Cover isposted by MR WAVETHEORY at 3/14/2006 08:44:00 AM
It was a perfectly ordinary day at the stock exchange. Three thousand brokers crowded the busy trading floor. At 1:25 p.m., a bomb went off in the basement garage. “We were all lifted above the ground by two feet,” one trader told the newspapers later. “There was blood everywhere and people were rushing to get out,” the director of the exchange said. Some traders were trampled to death in the stampede. In all, 50 people died at the exchange that day.
Fact or fiction? It really happened. The explosion at the Bombay Stock Exchange in 1993 was one of several attacks that killed 260 people across the city that day. And
it wasn’t the first time a stock exchange had been bombed. In 1990, a bomb destroyed most of the visitors’ gallery and tore a hole in the façade of the London Stock Exchange. There were no casualties, partly because the bomb threat was phoned in but also partly because electronic trading had already supplanted activity on the trading floor in London to the point that the visitors’ gallery was scheduled to be closed. (The “electronification” of trading is a key point in security thinking, as we shall see later.)
Add to these incidents the suspension of trading in the United States for four days after the terrorist attacks of 11 September 2001, and you cannot help but wonder what major security threats face financial markets today — and what investment firms, stock exchanges, and regulators are doing about them.