U.S. financial regulators are facing one of their greatest challenges since the financial crisis: how to take control of mounting investor fears without stoking a panic
.
In some of the more severe hypothetical scenarios of how this could play out, the outbreak threatens to expose lingering dangers that the Fed and other regulators have long been watching — from the record-high level of debt held by businesses to the unpredictable behavior of ultra-fast automated stock traders.
If people begin “going less to the movies, to bars, to restaurants,” said Torsten Slok, chief economist at Deutsche Bank Securities, that would be a “big deal” in economic terms. If the virus starts affecting people’s ability to go into work, “banks will first lose the ability to make a lot of loans in a productive fashion because companies will be shuttering down,” Bove said. “The second thing that happens is existing loans start to go bad; in other words, companies that have taken out meaningful amounts of debt can’t repay the debt because they don’t have the revenues that allow them to do so.
There’s less data on how an algorithm responds in a downturn, given that the practice has risen in popularity during one of the longest periods of market growth in history. Defenders of high-frequency trading say the practice helps grease the wheels of the markets by making it easier for everyone to buy and sell at more accurate prices.Vanguard explained in an April 2019 blog post“There's a long history of volatility in the marketplace that pre-dates HFTs,” said John Ameriks, global head of Vanguard Quantitative Equity Group.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Corona will continue controversial promotion for hard seltzer amid coronavirus outbreakConstellation Brands will continue a marketing push for its new Corona Hard Seltzer amid controversy that its tagline 'coming ashore soon' is in poor taste.
Read more »
People are scared of buying Corona beer amid coronavirus pandemic fears, new poll shows'Unfortunately for one of America's favorite beers, that fear has extended to [Corona] even though the illness has nothing to do with the adult beverage,' said YouGov.
Read more »
Corona releases 'poorly timed' ad during coronavirus outbreak - Business InsiderAs the coronavirus goes global, Corona Hard Seltzer releases new ad about the beverage 'coming ashore soon'
Read more »
‘Corona beer virus’ and ‘beer coronavirus’ searches increase as fears of outbreak spreadAs the coronavirus continues to spread, Mexican beer brand Corona is drawing criticism for a social teaser promoting the brand's hard seltzer.
Read more »
The spread of the coronavirus couldn't have come at a worse time for Corona beerCorona beer isn't making any changes to its advertising despite the name's unfortunate similarity to the deadly coronavirus. Two surveys released this week show that the Corona's brand is suffering from negative buzz.
Read more »
Corona may be taking a hit amongst drinkers because of coronavirus - Business Insider'There's a good amount of misinformation out there,' a spokesperson for the company that distributes Corona in the US told Business Insider.
Read more »