EU Watchdog Says Keeping Markets Open Is Vital for the Economy

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(Bloomberg) --

A top European regulator said, keeping markets open amid the coronavirus outbreak is vital for economies and the financial system, echoing the view of hedge funds, money managers and banks.

Functioning markets will allow investors to react to new information about the pandemic and adjust their portfolios accordingly, according to Steven Maijoor, chairman of the European Securities and Markets Authority.

“ESMA’s objective is to maintain markets that are open and orderly as they are vital for the functioning of our economy and financial system, especially in the current circumstances,” Maijoor said in an emailed statement. ESMA, which coordinates oversight of markets across the region, has been tightening controls on short-selling while giving traders more leeway on reporting requirements while they work from home.

A group of lobbying associations last week told regulators and lawmakers in Washington and Europe that shutting markets could wreak further havoc on the economy. Among those who signed letters to the policy makers were officials from the Managed Funds Association, whose Washington-based group includes hedge funds, and the Investment Company Institute, which represents traditional asset managers.

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