The Center for Innovative Financial Technology (Cift) at Lawrence Berkeley National Laboratory was set up, in part, as a response to the May 2010 flash crash, which, says a statement, "was something of a wake-up call that complex markets, built on real computer networks, were capable of unanticipated and dangerous behaviour".

With several more high-profile cases of computer-related market failures - including the Facebook IPO and Knight Capital disaster - hitting in recent months, Cift has received financial backing from Tudor Investment Corporation, AJO Partners, Infinium Capital Management, and the Nasdaq/OMX Foundation, which is supporting both the centre and an affiliated UC Berkeley computer scientist.

Cift says that the data-intensive computing challenge is similar to those addressed by Berkeley Lab's computing sciences organisation, which has experience in using supercomputers to study large-scale problems and developing new methods to model processes and complex systems.

David Leinweber, director, Cift, says: "The need for improved analysis, simulation and testing of market system integrity has been demonstrated repeatedly by a series of market mishaps. There is no algorithm certification of any sort today. In virtually all other complex systems, modeling and simulation play a central role. It's not easy to do right, but with enough horsepower it becomes feasible to consider."

Marcos Lopez de Prado, head, global quantitative research, Tudor Investment Corporation, adds: "Those responsible for market oversight could benefit from real-time ability to effectively monitor a complex system. Recent events, including the Flash Crash and other market disruptions, have highlighted the need to solve potential inadequacies in market structure and execution."