New SEC Chief Hails Agency Handling of 190 Point Plunge

The new head of the Securities and Exchange Commission told a congressional panel today the handling of Wall Street’s 190 point plunge on Oct. 13 shows “the value of the market improvements adopted during the past two years.”

SEC Chairman Richard C. Breeden was the star witness before a House panel on market reform.

It was Breeden’s first public questioning since the Dow Jones industrial average plunged 190.58 points on Oct. 13. The Dow rebounded to close up 88.12 points the following Monday.

“We learned important lessons from the market turbulence of Oct. 13 and Oct. 16 and the market’s responses to it,” Breeden said.

“The volume surges and volatility experienced on those two days exemplify fundamental changes in our markets; they were not isolated instances. We should not panic in the face of these events, however. For what was demonstrated on Oct. 13 and 16 was the strength and resiliency of the nation’s markets.”

He noted that more shares were traded in one hour during the Oct. 13 slide “than were traded on the average full day in 1985” and three times the market’s average daily volume 10 years ago.