Wall Street Worries About Risk Running Amok With Traders at Home
- With traders dispersed, banks more hesitant to take on risk
- Some signs of market turbulence are already emerging
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With signs of stress already flashing across global markets, the coronavirus is underscoring an ugly reality for Wall Street banks: It’s harder to handle trading risks from outside the office.
As banks including JPMorgan Chase & Co. and Bank of America Corp. split up their trading teams and ask staff to work from home, they’re likely to lose some ability to react quickly to market moves and take on big positions. If others follow suit, that will mean less liquidity to absorb a wave of sell orders from investors, potentially exacerbating price drops and even raising the possibility of creating a vicious circle.