By Huw Jones
LONDON (Reuters) – The European Union’s financial markets “coped well” during turmoil sparked by Britain’s vote last week to leave the bloc, with no special controls needed to be imposed by regulators, the EU’s top securities watchdog said on Wednesday.
Markets fell sharply on Friday on the outcome of Britain’s referendum on EU membership, with bank shares across Europe plunging and sterling hitting its lowest level in three decades.
Financial companies such as France’s Societe Generale
“The market infrastructure has coped well with the impact and that was not a reason to have any extraordinary measures,” Steven Maijoor, chairman of the European Securities and Markets Authority, told a Politico event in London.
The role of markets was to adjust values of assets and it was important to allow it to do this, Maijoor said.
ESMA and national regulators coordinated in advance and decided there was no need to use their powers on Friday, such as imposing short-selling bans, he said.
This contrasted with recent temporary short-selling bans imposed by the local regulator on some Italian and Portuguese lenders.
Separately on Wednesday, Brian Schwieger, head of equities at the London Stock Exchange Group
“The platform was fine. Yes, the market was down, but it remained orderly,” Schwieger told Reuters on the sidelines of a conference in Hong Kong.
Britain’s decision to leave the EU has raised questions about whether its financial market, Europe’s biggest, should still abide by the bloc’s rules.
Some major EU financial reforms, like the MiFID II shake-up of securities markets, won’t come into effect until January 2018.
“In the current situation, all EU law continues to apply and also we need to continue to prepare for EU law that’s in the pipeline,” Maijoor said.
Britain’s Financial Conduct Authority has also stated this, Maijoor added.
(Additional reporting by Michelle Price in Hong Kong; editing by David Clarke/Keith Weir)