⁍ Traders, bankers and wary fund managers told Reuters they are preparing for a wide range of outcomes.
⁍ One bank’s equities desk has been running drills across major trading hubs in New York, London, Paris and Hong Kong.
⁍ Since banks began preparing for the election, polls and circumstances have shifted several times – making lenders more jittery about any assumptions.
– Expect a lot of “war game” drills on Wall Street on the final days before the US election, as major financial firms prepare for the possibility that markets could go haywire. Insiders tell Reuters that banks have been holding drills across major trading hubs in New York, London, Paris, and Hong Kong to make sure their systems can handle anything that could go wrong. One executive says one bank’s equities desk has been reaching out to customers to get their thoughts on how much they expect to trade and whether they need to increase their margin limits. Another says a global lender hired its own polling firm to check popular assumptions, but the bank is preparing for other scenarios anyway. “I don’t think anybody is willing to bet on any particular outcome,” Peter Kraus, a former Goldman Sachs executive, tells Reuters. “The rational thing to do is to take your risk down. I would much rather be coming into the election with a set of flat positions and liquidity and, if the worst happened, I would be able to service the trading volume.”
Source: https://www.reuters.com/article/us-usa-election-banks-contingency/jittery-wall-street-banks-war-game-the-election-with-drills-client-calls-special-pollsters-idUSKBN27F2IK