There's no indication that the historic Flash Crash of May 6 was the result of targeted action by someone bent on harming the United States. But financial terrorism is a concept that has gotten some attention in recent years, and last week's gyrations serve as a stark reminder that the U.S. market conceivably could be targeted someday.

An executive at Booz Allen  (Booz Allen news) recently said it may only be a matter of time before a "catastrophic event" occurred. He suggested at a recent conference the possibility of "a serious dispersed alliance where creative code collaborators in places like Pakistan, Turkey and Germany get together to launch a carefully constructed attack, from some set of servers in Asia," as reported by Securities Industry News.

Their goal: Destabilize markets and the global financial system and basically terrorize the U.S. The solution? Eventually, we'll have to "move financial communications onto a more secure network than the Internet. One that authenticates every user and has rock-solid protection for the digits it stores and exchanges." But that's light years away.

In the meantime, a coordinated defense strategy needs to be thought out. Booz Allen suggests a system in which Verizon and AT&T, the stock exchanges, major banks, energy and power executives and military officials collude in advance of an event and in response to an event. 

For more:
- here's the article

Related Articles:
Wall Street free fall: Was sponsored access at issue?
Stock slide: Did technology exacerbate a fat-finger error?
Societe General alleged code thief denied bail, case highlights need for controls