Banks hope to keep trading floors open if London faces stricter coronavirus lockdown
Global banks are hoping to keep their London trading floors open amid the worsening coronavirus pandemic and are confident that traders would be designated “key workers” if the capital is placed on formal lockdown.
Five major banks told Morning Wire they were planning to continue operations with their traders split between core sites in the City and Canary Wharf and backup facilities on the outskirts of London.
Four of the banks said they were confident their traders would be designated as “key workers” by authorities if more draconian shutdown measures were introduced across the capital, meaning they could still travel to work.
“In the event of a lockdown, we would expect that [traders] would be treated as key staff, just for the functions of the financial markets,” one bank told Morning Wire
Another said key worker definitions “depend on how much you value financial stability and the liquidity of markets, which one would imagine the government would be very very concerned about”.
While all banks said they were working on contingency measures for if the situation in London worsens, many expressed doubts over the practical and regulatory feasibility of traders working remotely on a large scale.
The Financial Conduct Authority (FCA) this week slightly eased its stance on market makers working from home, but did not give much detail on possible regulatory changes.
The watchdog said on Tuesday that while it expects firms to continue to fulfill their regulatory requirements, such as recording calls, while traders work from home, it accepted that “some scenarios may emerge where this is not possible”.
The FCA said firms should notify it if they are unable to meet the requirements, and “to consider what steps they could take to mitigate outstanding risks” if they cannot comply.
“For traders to be able to work from home, the regulator would have to significantly relax some of its regulations”, one bank said. Another echoed the suggestion the FCA would have to “waive certain rules” before traders could work remotely, adding: “whatever we’re told we’re able to do, we’ll do”.
One lender said it was increasing the number of its traders who were equipped to work from home, and that the main obstacles to this — technology and oversight — were both “manageable”.
Another said that while it was “perfectly possible from a technological point of view and a regulatory view” to have traders working from home on a large scale, “you wouldn’t implement it until you absolutely need to” because of the complexities involved.