The Center for Innovative Financial Technology (CIFT) at Lawrence Berkeley National Laboratory this week received $100,000 in research donations from a number of sources. The plan is to use the money to study the use of supercomputing and data intensive science with the goal of improving stability, regulation and enforcement in U.S. markets.

Funders included Tudor Investment Corporation of Greenwich CT, AJO Partners of Philadelphia, Infinium Capital Management of Chicago and the NASDAQ/OMX Foundation, which is also currently supporting an affiliated UC Berkeley computer scientist.

CIFT was established partly in response to the 2010 Flash Crash, which was taken as a signal that a financial system built on real computer networks could pose a threat to market stability.

“There are many ways existing supercomputer computing systems are advantageous to regulation and enforcement,” said CIFT Director David Leinweber, in a statement. “They remove all of the data size and computation speed limits for these functions. 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.”

According to Marcos Lopez de Prado, head of global quantitative research at the Tudor Investment Corporation, research thus far has shown that even relatively simple analytics can provide up to an hour's advanced warning of some market anomalies.

Other recent projects of note taking place at the Lawrence Berkeley National Laboratory include using powerful X-rays to peer into the molecular structure of optoelectronic materials in order to discover what is responsible for superior or inferior performance. Another study at Lawrence Berkeley National Laboratory is using thin films of harmless virus to power electronic devices like nano-sensors, pacemakers and cell phones.

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