Exchange groups in the united states will also be battling similar calls for closing. US Treasury Secretary Mnuchin said lately that he’d met with banks and exchanges urging them to shorten trading hours in light of the impact of coronavirus. Not all exchanges agreed with the proposal, and some were thrown off guard by Mnuchin’s comments.
European exchanges will be impacted by the ongoing spread of coronavirus but has to continue to operate as normal, the Federation of European Security Exchanges (FESE) has claimed.
The FESE, with members comprising European exchange operators, also stated it was vital that markets remain open, and detailed the major role exchanges perform in supplying price formation, transparency and liquidity.
Preventing exchanges from operating would have a massive, damaging impact on the market, FESE additional, together with OTC markets specifically likely to determine material impact from a closed of lit markets.
“Closing the markets wouldn’t alter the root cause of the industry volatility, it might remove transparency of investor opinion and decrease investors access for their money; all of that will compound present marketplace pressure and result in a negative decrease in investor results,” FESE said.
“These acts are put to the test previously for example throughout the fiscal crisis — when other sources of liquidity dried — exchange markets successfully continued to operate. This scenario is no different, exchanges should continue to be usable to keep trust,” FESE added.
Regardless of the rapid spread of coronavirus, European exchanges need to continue to operate, according to exchange association FESE.