Covid-19: Financial Markets

Baroness Altmann Excerpts

Wednesday 25th March 2020 Lords Chamber

[Lord Callanan]

There are competition issues involved in doing that, as the noble Lord will be well aware of, given his experience. We have some powers in certain sectors and at the moment we are looking at this within the existing framework of legislation.

[Baroness Altmann (Con)]

My Lords, I understand my noble friend’s words about wishing to maintain orderly markets. While we are traditionally a country that supports free markets, I too echo the concerns expressed by my noble friend Lord Bates and others around the House today that in the current circumstances, which are exceptional, there are serious concerns about the orderliness of the markets. Those concerns are not only about short selling but also program trading and algorithm trading. There has been evidence over the past few months that some operators in the market have been behaving unscrupulously because they have advance information that is just a few nanoseconds ahead of others, which has led to enormous profits. Will the department consider looking at the implications of this for UK pension funds, which are currently struggling in the market environment that we are facing during this emergency, and will it consider whether some other measures might be necessary?

[Lord Callanan]

I know of the close interest that my noble friend takes in pension funds, so she will be aware that many of them also take advantage of taking both short and long positions to allow for the hedging of risk. However, I can certainly assure her that we continue to closely monitor market activity, including short selling activity, and we are constantly evaluating our approach to ensure that it is the right one for consumers. Further, if it is required, we will not hesitate to take action.