Hedge funds, stock exchanges, banks and even brick-and-mortar businesses have a unified message for global policy makers: Shutting markets because of coronavirus-fueled volatility would wreak havoc on the U.S. and European economies.
“The markets continue to serve the needs of participants to raise capital, manage investments, access cash and manage risk,” leaders from a wide range of corporate trade groups and companies wrote in a recet letter to U.S. officials including Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell.
On Friday, a similar group sent essentially the same warning to regulators including European Central Bank President Christine Lagarde and top finance and economic officials from Germany, France, Italy, the U.K. and the Netherlands.
Among those who signed both letters were officials Managed Funds Association, whose Washington-based group includes hedge funds, and the Investment Company Institute, which represents money managers. The letter to U.S. regulators was also signed by U.S. Chamber of Commerce Chief Policy Officer Neil Bradley and the heads of the major American stock exchanges.
The pleas follow days of violent market swings that have triggered a surge in rumors that regulators will suspend trading to halt steep sell-offs for stocks and other assets.
In Washington, Mnuchin added to the speculation this week by saying that President Donald Trump’s administration plans to keep markets open but might shorten trading hours. Across Europe, meanwhile, regulators stepped in with bans on short-selling.
“We urge European leaders to express clear support for keeping markets open so that they can continue to promote an orderly flow of financing, access to capital and support to the global economy,” Managed Funds Association President Bryan Corbett said in a Friday statement.
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