Algorithms trading on financial markets are too often poorly designed and monitored, leaving traders and markets open to mistakes, disruptive trading and market abuse, the Financial Conduct Authority and Bank of England have warned.

Often algorithms - computer programs which decide and make trades with little or no human interaction - are thoughtfully created and well monitored for good performance and behavior, the regulators said.

But such trading is not always positive: “It can occur at rapid speeds, which means that existing risks could be amplified if risk management and other controls are not effective or are poorly aligned with the firm’s risk appetite and governance arrangements,” the Bank’s Prudential Regulation Authority said.

“Consequently, it is crucial that appropriate governance and risk management arrangements are in place.”