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【纽约客】不靠谱的股市熔断机制 | 取经号




January 12, 2016

The Dubious Logic of Stock-Market Circuit Breakers


By Paul Kedrosky

Stock-market circuit breakers, which trigger cooling-off periods in financial systems, are a good idea in theory, but they weren’t in the Chinese design. Credit Photograph by Imaginechina via AP

Many things that are supposed to make you safer don’t actually do so. Taking off your shoes at airports, for example, is largely security theatre. (How many prospective shoe bombers have been nabbed since Richard Reid?) But the practice offers the impression of protection, so it stays—just to be on the safe side, you know.


Other safety devices, like bicycle helmets, may have a more subtly undermining effect, at least according to some “risk homeostasis” theorists, who hold that helmets can lead some people, feeling more secure in the knowledge that they’re “safe,” to ride faster, increasing the potential for accidents, or to ride less often, making them less healthy. (Studies on the subject have shown mixedresults.) To take another example, people whose cars have anti-lock braking systems are sometimes said to drive less cautiously in slippery conditions.


Then there is a third class of misguided safety measure. This type creates the illusion of safety but actively makes things worse. A good example is antibacterial soap, which has been shown to be no more effective than regular soap, and which carries risks like the creation of antibiotic-resistant bacteria. Circuit breakers in financial markets, which are intended to automatically shut down trading when the market declines by a predetermined amount, arguably belong to that third group. This was evident last week in China, where new circuit breakers, put in place to prevent market crashes like the ones the country experienced last summer, were suspended on January 7th, only four days after being implemented.


The Chinese circuit breakers were designed to kick in progressively, at two levels of decline. The first threshold was a market drop of five per cent, which would cause an automatic fifteen-minute pause in trading. The second one, which would shut down trading for the day, kicked in after a seven-per-cent decline. But in practice, rather than protecting investors, the controls appear to have made the markets more crash prone, causing wholesale trading shutdowns last Monday and Thursday. On Thursday, trading stopped after only twenty-nine minutes.


The appeal of circuit breakers in financial markets is obvious: when market behavior starts to present a major risk, the breaker trips, much like a real-world fuse would, imposing a cooling-off period before anything (a toaster, an economy) gets fried. They’re a good idea, at least in theory, but they weren’t in the Chinese design.


To understand why circuit breakers can make markets less “safe,” imagine that you’re a Chinese trader on a day when markets are approaching a five-per-cent decline. What do you do? Most likely, you sell madly, trying to get your orders in before the fuse is triggered and the markets are halted for fifteen minutes. In effect, you help cause what you are trying to avoid. Then, when the exchanges open again, what’s your single biggest fear? That markets will decline another two per cent, causing trading to end for the day. So what do you do now? As soon as the market reopens, you sell frantically, as do your peers, causing the seven-per-cent fuse to be tripped even faster. And once that has happened for the first time it’s likely to happen again. Investors will remember previous shutdowns, so if they’re leaning toward selling on a given day they’ll try to do so even faster this time, to avoid being caught out. That’s what happened in China on Thursday.


This sort of mess is more likely to happen when breaker systems are poorly designed. Lousy breakers have their thresholds set too low, guaranteeing that they’re tripped constantly, or are set too close together, creating a kind of attraction effect that pulls investors from one break point to the next, like iron filings to a nearby magnet. Chinese regulators managed to make both mistakes. They set the levels too low—five-per-cent declines are much more common in China than they are here—and made the breakpoints too close together. The end result was that, in trying to make safer a system they didn’t trust, regulators likely helped make it more volatile.


By way of comparison, in the U.S, the S&P 500 breakers have three thresholds: at seven per cent, thirteen per cent, and a total shutdown in the event of a whopping twenty-per-cent decline. But although higher triggers and wider fuses are better they don’t solve all the structural problems with market circuit breakers, as the U.S. has discovered.


Our flirtation with financial-market circuit breakers is relatively recent, not to mention conflicted and entertainingly fickle. Following the crash of October, 1987, there were immediate calls to create a way of stopping market free falls. But, despite the potential economic consequences of such collapses, many people still objected to the idea of a fail-safe device, on both the technical grounds outlined above and on the principle that the markets should be allowed to find their own levels, falling as far it took to find new buyers. (This argument echoed Treasury Secretary Andrew Mellon’s infamous call to Herbert Hoover, during the Depression era, to let stocks fall and “purge the rottenness” from the system.)


Nevertheless, market-wide U.S. circuit breakers were instituted in 1988. After producing increasingly frequent trading pauses over the next decade, as the size of the market grew, the breakers went mad in 1997, triggering constantly and causing a full shutdown on October 27th. This caused a bout of recriminations and some significant tweaks to the system, notably a shift to percentage-based thresholds. Since 1997, market-wide breakers have been triggered precisely … never. No market event since 1998—including the worst declines of the Great Recession and the “flash crash” of May, 2010, when the value of many major stocks briefly plummeted in value—has triggered a system-wide stoppage. (Stock-specific breakers, which were implemented in the U.S. after the flash crash, are routinely triggered; these don’t exist in China.)


In the wake of last week’s market swings, U.S. regulators and market observers were quick to chide the poor design of China’s circuit breakers. (“I don’t trust anything about China,” CNBC’s Jim Cramer said. “They had no clue, it seems, of what the circuit breakers would do in terms of the consciousness of the country.”) But Americans shouldn’t be too quick to judge: both countries have been kidding themselves about the extent to which their circuit breakers accomplish the goal of making the markets safer. It’s true that China, which is newer to capital markets and more anxious about their volatility, made things worse by imposing harsh controls. But while the U.S. approach has become more sophisticated, over time, it has been left with an ugly mix of complex single-stock curbs and market-wide breakers that are effectively security theatre.


For now China’s breakers are gone, and its markets are again trading freely; Monday saw a five-per-cent dip in the Shanghai index and a six-and-a-half-per-cent drop in the Shenzhen. But don’t bet that the breakers will be gone forever. Once things settle down, and Chinese regulators have a chance to reflect on what went wrong, we will likely see their return. It’s possible that China will find the right balance for its volatile markets, but it’s possible, too, that it will follow the U.S.’s example, setting the breakers where they’ll never be triggered at all—left in place just to be on the safe side, you know.



《纽约客》(The New Yorker),也译作《纽约人》,是一份美国知识、文艺类的综合杂志,内容覆盖新闻报道、文艺评论、散文、漫画、诗歌、小说,以及纽约文化生活动向等。《纽约客》现由康得纳斯出版公司出版。《纽约客》不是完全的新闻杂志,然而它对美国和国际政治、社会重大事件的深度报道是其特色之一。他一方面保持了轻松幽默的主题风格,另一方面它也很快成为严肃新闻报道和文学创作的一处显要出版窗口。


1. Security theatre:安全场。

Security theater is the practice of investing in countermeasures intended to provide the feeling of improved security while doing little or nothing to actually achieve it. Some experts such as Edward Felten have described the airport security repercussions due to the September 11, 2001 attacks using commercial jetliners in the United States, as security theater.

在对策中投资,以营造出安保加强的错觉,但实际效果寥寥。911事件中使用了商业飞机,机场其后在安保上采取的措施被爱德华·费尔顿(Edward Felten)等专家称之为“安全场”。

2. Homeostasis:平衡

N. the maintenance of metabolic equilibrium within an animal by a tendency to compensate for disrupting changes (动物间的)动态平衡

3. Prone

(1)Adj. To be prone to something, usually something bad, means to have a tendency to be affected by it or to do it. 易于 (受某事物影响或做某事) 的


For all her experience as a television reporter, she was still prone to camera nerves.


(2)COMB in Adj -prone combines with nouns to make adjectives that describe people who are frequently affected by something bad. 易受…影响的 (与名词结合构成形容词)


…the most injury-prone rider on the circuit.



4. Lousy:糟糕的

(1)Adj. If you describe something as lousy, you mean that it is of very bad quality or that you do not like it. 糟糕的


He blamed Fiona for a lousy weekend.


At Billy's Café, the menu is limited and the food is lousy.


(2)Adj. If you describe someone as lousy, you mean that they are very bad at something they do. 蹩脚的


I was a lousy secretary.


(3)Adj. If you describe the number or amount of something as lousy, you mean it is smaller than you think it should be. 微薄的


The pay is lousy.


(5)Adj. If you feel lousy, you feel very ill. 极不舒服的


I wasn't actually sick but I felt lousy.



5. Fail-safe:故障安全的

Adj. Something that is fail-safe is designed or made in such a way that nothing dangerous can happen if a part of it goes wrong. 有故障保险功能的; 有自动防障功能的


The camera has a built-in failsafe device which prevents it from working if the right signals aren't received.


6. Flash crash:美股闪崩

The May 6, 2010, Flash Crash also known as The Crash of 2:45, the 2010 Flash Crash or simply the Flash Crash, was a United States trillion-dollar stock market crash, which started at 2:32 and lasted for approximately 36 minutes.:1 Stock indexes, such as the S&P 500, Dow Jones Industrial Average and Nasdaq Composite, collapsed and rebounded very rapidly. The Dow Jones Industrial Average had its biggest intraday point drop (from the opening) up to that point, plunging 998.5 points (about 9%), most within minutes, only to recover a large part of the loss.

2000年5月6日上演的Flash Crash。美国道琼斯指数不到半小时的时间暴跌700点,之后又戏剧性的反弹600点。美国股市暂时性的蒸发了1万亿美元,创造了道琼斯指数单日日内下跌的最高纪录。





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