The international response to the Haiti earthquake was immediate and illustrates the benefits of the Richter scale. Thanks to the global seismic surveillance systems, geologists could accurately measure the strength of the earthquake: it was a major earth quake of strength 7.0, there was no need for second guessing. A major earthquake in a densely populated area causes huge personal suffering requiring international aid. Without waiting for more detailed analysis, international rescue operations went into action to mitigate hardship.
It is crucial for financial markets to have a similar Richter scale for events in the financial market, because political, economic and other events can trigger seismic shifts that derail the economy. Decision makers have to know about the occurrence of these events as soon as possible. The earlier that people learn about an event and the more precise their knowledge of its nature, the better their reaction. The Scale of Market Quakes (SMQ) service that Olsen Ltd offers for free on the Internet has been designed to fulfill this objective. Users are kindly invited to provide their feedback and suggestions of improvements.
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Why financial markets need a Richter scale
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