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CHAPTER THREE | TECHNOLOGICAL REVOLUTION
After the “Black Monday” crash of October 19, 1987, Wall Street was quiet, but
DTC began to explore potential scenarios.
rather than trying to figure it out on the fly. The ’87 crash was a lesson for all of us. There were some members who didn’t make it out of that crisis, so we had to manage that risk very carefully. We had to have an adequately capitalized participant’s fund that was sufficient to handle any kind of stress, which is why stress testing became so significant. These stress tests would also ensure that the technology could manage the rapid movements of the market. “You really didn’t want to be in a situation where we would have to close,” said John Colangelo, former managing director of operations, business re-engineering and client services. “We were always running simulations up until that time and beyond on what trades would look like and how much volume we could handle, and what our backup facilities were capable of performing against. Given that our primary regulators were the Federal Reserve and the SEC, we were working in lockstep to make sure that our systems and processes were as bulletproof as possible.” Risk took on even greater importance as the industry sped up and as DTC and NSCC relied more heavily on technological solutions. ■
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