– McClatchy Newspapers

WASHINGTON – With the cause of the stock market’s May 6 “flash crash” still unclear, senators told top federal regulators Thursday to take more aggressive steps to ensure that the unnerving market plunge doesn’t happen again.

Members of the Senate’s subcommittee on securities seemed most troubled that regulators couldn’t rule out a repeat of the 1,000-point drop in the Dow Jones industrial average, despite their promise to require new “circuit breakers” in June to slow trading across all U.S. exchanges when turbulence hits.

“I’m worried (that) by a lack of not getting something done, we could have a repeat,” said Sen. Jim Bunning of Kentucky, the top Republican on the panel. As he spoke, the Dow was down by more than 300 points.

What seemed to trouble senators most, however, was a sensation that high finance may prove similar to the surprise oil spill in the Gulf of Mexico: Protections may be insufficient when the unexpected occurs.

“My gut just says we may be looking at the beginning of what could be the next crisis,” said Sen. Mark Warner of Virginia, a prominent pro-business voice among Senate Democrats.

Securities and Exchange Commission Chairman Mary Schapiro said she shared Bunning’s “sense of urgency,” but that the existing brakes on market trading would have to do for now.

That didn’t sit well with Bunning. “I think there comes a time when you take emergency action,” he said. “All you have to do is come here and ask, because we don’t want a reoccurrence, and we sure don’t want to arbitrarily break (stock) trades. I would urge you to come and directly ask this committee for emergency powers.”

Schapiro said she’s taken numerous steps to bring greater transparency and oversight to Wall Street, and she’s overseeing a rethink of regulation to protect ordinary investors. She was sympathetic to Warner’s view that financial markets are supposed to be about providing capital so that companies and corporations can expand.

“At the end of the day, our markets have to be about investors and how companies raise capital,” Schapiro said.