While liquidity plays a central role in the functioning of financial markets, it is the volatility that can be truly damaging. Despite near-universal agreement among academics that HFT improves prices for investors and dampens volatility in stock markets, since May 6, 2010 the industry has come under intense scrutiny from regulators. On a day described as the “Flash Crash,” the U.S. stock market suffered one of the most severe price drops in its history. Within five minutes, the Dow Jones Industrial Index fell 900 points, only to recoup the rest of its losses over the next 15 minutes. This unprecedented and inexplicable volatility has sparked public debate ever since. In the aftermath of the US "Flash Crash", regulators were quick to place blame on HFT. Within a week the chairman of the US Securities and Exchange Commission determined that there was evidence that “professional liquidity providers” had withdrawn from the market when stocks began to fall, exacerbating the collapse. Perhaps irrationally, policymakers, without any significant evidence, believe that HFTs withdraw from markets when there are signs of stress, contributing to a sudden loss of liquidity and promoting volatility (Grant, 2011). Furthermore, Andrew Haldane emphasizes the “flash crash” when determining it. the ever-increasing speed of trading is amplifying volatility. In my opinion, in the aftermath of the financial crisis, when regulators have received so much criticism, I think they feel they have to act immediately, even if they don't know the real problem. I see this as evident from the calls for greater regulation of HFT by US Senator Charles Schumer, who bases his opinion on recent news (Zerohedge. 2010), rather than on academic research or scientific research… halfway through an article .... ..ttp://blogs.wsj.com/marketbeat/2009/12/08/volcker-praises-the-atm-blasts-finance-execs-experts/. Last accessed 04/12/11.Jones, R. (2010). Institutional Investor: Flash Crash and CyberWar. Available: http://hftsecurityrisk.com/category/flash-crash-specific/. Last access 04/12/11. Pagnotta, E & Philippon, T. (2010). The welfare effects of financial innovation: High-frequency trading in stock markets. Available: https://editorialexpress.com/cgi-bin/conference/download.cgi?db_name=SED2011&paper_id=1246. Last accessed 04/12/11.Mackenzie, M & Demos, T. (2011). Fears of a new "flash crash" remain. Available: http://www.ft.com/cms/s/0/d18f3d28-7735-11e0-aed6-00144feabdc0.html#axzz1fPJAVyJm. Last access 04/12/11. Geithner, T. (2007). Liquidity and financial markets. Available: http://www.newyorkfed.org/newsevents/speeches/2007/gei070228.html. Last seen 05/12/11.