russh
09.12.05, 15:22
Leading articles
The Times December 09, 2005
Slip of the fat finger
To err is human, even (especially) with foolproof hightech
Pity Mizuho Securities. Do not snigger. But feel fraternal sympathy with all
who have ever suffered a senior moment of scrambled memory: namely, most of
the poor, fuddled human race.
A trader on the Tokyo stock exchange was told to sell a single share in a
company flotation for 600,000 yen (about £2,850). Wires in the trader’s head
crossed, and he put through an order to sell 600,000 shares at a yen each. It
is the sort of slip that most of us can make at algebra or Su Doku. Market
dealers are supposed to be better at sums than the rest of us. But they no
longer shout face to face in a finger-waving, self-correcting hubbub. They sit
tapping keyboards. And all who tap keyboards know that error is not only
possible, but inevitable. Foolproof computer systems do not take into account
the ingenuity of fools.
As the insane offer flashed up on other screens it created shockwaves on the
Tokyo exchange. There was a deer-in-the-headlights effect, a carnage of
stockselling. Until the culprit firm was named, investors dumped shares of
every brokerage firm, in case it had been responsible. Nearly 2 per cent was
lopped from the value of the Nikkei 225 Index. The error cost the trader’s
company at least £285 million.
To err is human. A Swiss banker leant on his keyboard while attempting the
crossword, and bought an oil company. It cost his bank £60,000. Such cock-ups
are called fat fingers in the trade. And this was the fattest finger since
George III decided to tax the tea of the revolting colonials. One can tie a
knot in one’s handkerchief to aid memory. Euclid, Proposition 64: Numbers
cannot err — but what does knot in the handkerchief stand for? QED.