GUEST COMMENT: This is why traders shouldn't be allowed to work from home
The drunken million barrel trading and subsequent ban for a broker from PVM Oil Futures should not come as a surprise to the financial industry - the risk of a rogue trader losing the markets millions of pounds from an unmonitored environment has always been a matter or 'when' not 'if'.
While trading in one of the City's grand broking or banking houses is a heavily monitored and regulated affair, dealing from a laptop in the privacy of a trader's home poses huge risks to the financial markets. If this out-of-office financial trading is allowed to continue without bespoke regulations, future crashes are a risk.
New regulation methods need to be introduced. At the moment, every time a dealer accesses the markets in an environment outside of the firm's reach, the risk of speculative or rogue trades is immediately raised as there is no way to monitor the dealer.
The recent tighter regulations in the City have been justified following the huge number of speculative trades that were commonplace during the boom years. But traders are still able to access the markets through their company's websites from anywhere in the world, and though financial regulations and restrictions may still apply, the ability to monitor their mental capacity is not a possibility and with that flaw in regulation comes a risk.
The square mile is long over-due an overhaul on whether employed traders working from home should be given complete access to the markets.
If a dealer doesn't go into work but begins trading in a private environment, there is no way of verifying whether the trader concerned is in a fit state to make reasonable decisions. When a trader staggers into the office after a heavy weekend, their peers or bosses can instantly judge whether they are fit to trade; laptops at home are not fitted with breathalysers - something that has been highlighted in the case of the PVM Oil trader.
At ACF Consultants we provide a range of training for the financial markets including the world's most advanced simulator - Global Trader Ultra - which we use under a variety of scenarios and environments. We haven't yet tried traders' skills after plying them with a few rounds of drinks, but I'm sure there would be no shortage of volunteers!
