On 8 October 2024, the Financial Conduct Authority (FCA) published a speech by its chief executive Nikhil Rathi on “predictable volatility”, delivered at the FCA International Capital Markets Conference 2024.
The speech flags that we are living in an era of predictable volatility but that we must now expect to face it as a constant. Mr Rathi notes that the UK has a chance to lead how capital markets can drive economic growth and development, and highlights the need to nurture liquidity, shift regulation and adopt a new mindset towards risk. He reminds the industry that no single entity has all the answers that “it will take action from us all”.
Mr Rathi gives examples of events he has seen during his career that show just how volatile markets can be, including Brexit, the pandemic and conflict in the Middle East.
Reasons discussed for the sharp rise in volatility and resulting risk include:
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Technology, including the use of algorithms (which accounted for up to 60% of tradi